TITLE:
Technological Progress, Spatial Competition and Industrial Location: Estimation and Predictions of Cement Industry in Northwest China
AUTHORS:
Fei Wang, Qiliang Mao
KEYWORDS:
Spatial Competition, Industrial Location, Technological Progress, Market Access, Computable Spatial Economic Model
JOURNAL NAME:
Modern Economy,
Vol.7 No.9,
August
17,
2016
ABSTRACT: This study estimates a theoretical multi-region industrial location model
by adopting real statistics to investigate the intuition of shaping spatial
pattern of economic activities in a case of cement industry in Northwest China.
Based on the estimation of key parameters, we simulate the impact of technological
progress on variation of location. We find that, given trade cost, with
technological progress, operating cost decreases, it is profitable for firms to
expand sale range. In long term, technological progress would induce server
spatial competition and promote further spatial concentration of industry.
Original areas with larger market and fine industrial base are still main agglomerations,
while original peripheral areas are further to a downward trend, and parts of
original areas located next to hot pot areas have become peripheries. Our study
on influence of technological progress on industrial location confirms the
importance of investigation on intuition of spatial pattern of economic
activities. Technological progress is essentially achievement of sustainable
development. However, neglecting substantial spatial competition induced by technology
improvement turns against spatial allocation of resources. Hence, optimal
location of industries is one of important factors to ensure sustainable development.