Institutional Analysis of Enterprise Agglomeration and Urban Development

Author: Wang Hongxia
Publisher:
Publish Date: 2005-12-26
Features: This book primarily approaches the micro-perspective of enterprise agglomeration by establishing a city development model based on enterprise agglomeration and a city development and evolution model that combines self-organization and organization. It empirically examines the urban development process of the Yangtze River Delta region since the reform and opening-up, under the influence of institutional factors. By exploring the urban development path of the Yangtze River Delta region since the reform and opening-up, the book discusses and reveals the internal driving forces and patterns of urban development in different periods and stages.
The city development model based on enterprise agglomeration indicates that: as a comprehensive agglomeration of population and economic activities, urban development and evolution are essentially driven by enterprise agglomeration behavior. Specifically, enterprise agglomeration behavior primarily affects urban population agglomeration activities through the urban labor market, influencing urban scale changes and demographic characteristics. Through the urban product market, it primarily affects urban economic agglomeration activities, thereby influencing the industrial structure and economic characteristics of cities.
Building on this, the book takes the urban development of the Yangtze River Delta region as an example, drawing on the urban development and urban system evolution models from new spatial economics to examine and assess its urban development path since the reform and opening-up. The findings reveal that: due to the influence of institutional factors, the new spatial economics urban development and urban system evolution models, which ignore institutional variables, cannot adequately explain the urban development and evolution of the Yangtze River Delta region since the reform and opening-up.
Therefore, the book modifies the new spatial economics urban development and urban system evolution model by incorporating institutional variables to establish a city development and evolution model that combines self-organization and organization. It conducts empirical analysis and research on enterprise agglomeration and urban development evolution in the Yangtze River Delta region since the reform and opening-up, finding that: due to the significant role of institutional factors in influencing and determining the urban development process alongside market factors, the impact of institutional factors on enterprise agglomeration and urban development cannot be overlooked. Since the reform and opening-up, the urban development of the Yangtze River Delta region has actually undergone a transition from being primarily driven by industrialization to being dominated by government intervention.
Among these, although the patterns and characteristics of enterprise agglomeration and urban development in Jiangsu, Zhejiang, and Shanghai have varied since the reform and opening-up, all three regions exhibit a clear common feature: the combined influence of enterprise agglomeration and policy intervention—i.e., market forces and institutional factors—has shaped urban development and evolution. Moreover, the impact of institutional intervention and institutional improvement on urban development is particularly prominent.
On this basis, to further reveal the urban development path models of Jiangsu, Zhejiang, and Shanghai, the book examines enterprise agglomeration patterns, utilizing specialized economic indicators and urbanization economic effect indicators. Through analyzing the changes in employment population distribution and production distribution in these three regions since urban development accelerated, and by calculating the urbanization economic effect index for the Jiangsu and Zhejiang regions, it further empirically investigates the distinct urban development paths of Jiangsu, Zhejiang, and Shanghai within the Yangtze River Delta region since the reform and opening-up. The findings reveal:
1. Within the Yangtze River Delta region, Shanghai is characterized by a "government-led" urban development path, while Zhejiang is marked by a "market-led" urban development path. Jiangsu's urban development path falls between the two, representing a "government-market hybrid" model.
2. Among the two distinct urban development paths in Jiangsu and Zhejiang, the "market-led" urban development in Zhejiang demonstrates significant urbanization economic effects, whereas the "government-market hybrid" model shows less pronounced urbanization economic effects. This suggests that the "market-led" urban development path may be superior to the "government-market hybrid" model. Additionally, combining the city development model based on enterprise agglomeration, a "government-led" urban development model may be detrimental to long-term urban development.
3. Focusing on enterprise agglomeration while actively improving institutions and leveraging institutional incentives to drive urban development and urbanization is essential for healthy, sustainable, and rapid urban growth.
Finally, the book proposes corresponding recommendations to accelerate urban development and urbanization in the Yangtze River Delta region in the new century, based on the current state of urban development in the region.