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Evaluation of role of Home Market Effects in China’s manufacturing industries

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Abstract

Under the theoretical framework of the New Trade Theory and the New Economic Geography, Home Market Effects (HMEs) is considered to be important sources of comparative advantage and significant reasons for industry agglomeration. Through the analysis on the input-output tables in China, the paper confirms the existence of HMEs for the manufacturing industries and their export trades on the national and provincial level in China. Several conclusions have been drawn in this study. Firstly, there exist prominent HMEs for manufacturing industries related with nondurable goods and materials in China. Secondly, 10 of the 15 kinds of manufacturing industries considered in this study display the existence of HMEs. Thirdly, the comparative advantage of factor endowment for the export trade of manufacturing industries is declining, while HMEs for them are increasing. Fourthly, among the 30 provincial regions studied in this paper, 11 regions show the existence of HMEs, most of which are located in the eastern coast region. This paper illustrates the simultaneous existence of the comparative advantage of factor endowment and scale economies of HMEs for China’s manufacturing industries. HMEs will not only be the new dynamic for the increase of manufacturing industries and their export trade, but also be the primary power for urban economic growth, industry improvement, and urban space expansion for China.

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Authors and Affiliations

  1. The Center for Chinese Modern City Studies, East China Normal University, Shanghai, 200062, China

    Xuliang Zhang & Yuemin Ning

  2. The Center for Urban and Regional Studies, Shanghai Academy of Social Science, Shanghai, 200020, China

    Yuemin Ning

  3. The Institute of Creative Industries, Yiwu Industrial & Commercial College, Yiwu, 322000, China

    Xuliang Zhang

Authors
  1. Xuliang Zhang
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  2. Yuemin Ning
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Correspondence to Yuemin Ning.

Additional information

Foundation item: Under the auspices of Humanities and Social Sciences Research Fund Project of Ministry of Education of China (No. 2009JJD790014, 10YJA790005)

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Zhang, X., Ning, Y. Evaluation of role of Home Market Effects in China’s manufacturing industries. Chin. Geogr. Sci. 21, 211–221 (2011). https://doi.org/10.1007/s11769-011-0458-0

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  • DOI: https://doi.org/10.1007/s11769-011-0458-0

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