Regional Development of Manufacturing Industry in the Eastern and Midwestern Regions of China——Based on the Theory of “Home Market Effects”
ZHAO Yong1, ZHANG Yang2
1.School of International Trade, Central University of Financial and Economic, Beijing 100081, China; 2.Jinan Branch, Peoples Bank of China, Jinan 250002, China
Abstract “New Economic Geography Theory” emphasizes that scale economy is the driving force of regional and international trade and it is referred to as “home market effects” by Krugman. “Home market effects” is not only of important theoretical significance but also of realistic economic significance. With the help of “time series analysis”, the authors made an empirical test of the “home market effect” of the manufacturing industry in the east and midwest areas of China. The outcomes show: in most manufacturing sectors in the regional economic development of the east and midwest of China, the scale of local demand played the main role and the effect of the centripetal and centrifugal forces of enterprises productivity and fixed costs on “home market effects” is verified in general. Therefore, in the process of pursuing harmonious development of future regional economy, emphasizing fostering the “home market effects” of relevant industries is of great significance.
DIAO Yong,ZHANG Yang. Regional Development of Manufacturing Industry in the Eastern and Midwestern Regions of China——Based on the Theory of “Home Market Effects”. Economic Survey, 2012, 1(2): 037.
2012, Vol. 1 
