IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i2p1727-d1037870.html
   My bibliography  Save this article

How Does Digital Economy Promote the Geographical Agglomeration of Manufacturing Industry?

Author

Listed:
  • Meijuan Wang

    (School of Economics, Shandong University, Jinan 250100, China
    School of Tourism, Shandong Women’s University, Jinan 250000, China)

  • Mingzhi Zhang

    (School of Economics, Shandong University of Finance and Economics, Jinan 250014, China)

  • Haiqian Chen

    (School of Economics, Shandong University, Jinan 250100, China)

  • Donghua Yu

    (School of Economics, Shandong University, Jinan 250100, China)

Abstract

With the acceleration of informatization, the spatial layout of economic activities has gradually shifted from “transportation cost + labor force” to “information + technology”. As a new generation of information, the digital economy has a profound impact on the spatial layout of the manufacturing industry. Based on the data of China’s listed manufacturing companies from 2001 to 2020, this paper aims to assess the effect of the digital economy on manufacturing agglomeration and identify the transmission mechanism of this effect. The results show the following: (1) The digital economy significantly promotes the geographical agglomeration of the manufacturing industry, which is still valid on the basis of a series of robustness and endogeneity tests. (2) Mechanism analysis shows that the digital economy promotes manufacturing agglomeration by reducing transaction costs, increasing market potential and enhancing knowledge spillover. (3) Heterogeneity analysis shows that the effect is more significant in the samples of large enterprises, high-tech manufacturing, central and western regions, small and medium-sized cities and the west side of the “Hu Huanyong Line”, which will greatly help the layout of the manufacturing industry break through the “Hu Huanyong Line” to achieve balanced development. (4) Globalization, localization and human capital play a significant positive moderating role in the process. This paper provides microevidence for the integration of digitalization and industrialization. Furthermore, it has important implications for the formulation of digital economy policy, the high-quality development of the manufacturing industry and the continuous promotion of regional coordinated development.

Suggested Citation

  • Meijuan Wang & Mingzhi Zhang & Haiqian Chen & Donghua Yu, 2023. "How Does Digital Economy Promote the Geographical Agglomeration of Manufacturing Industry?," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:2:p:1727-:d:1037870
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/2/1727/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/2/1727/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yannis M. Ioannides & Henry G. Overman & Esteban Rossi-Hansberg & Kurt Schmidheiny, 2008. "The effect of information and communication technologies on urban structure [‘Trade and circuses: Explaining urban giants’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 23(54), pages 202-242.
    2. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    3. Junjie Hong & Shihe Fu, 2011. "Information and Communication Technologies and the Geographical Concentration of Manufacturing Industries," Urban Studies, Urban Studies Journal Limited, vol. 48(11), pages 2339-2354, August.
    4. Forman, Chris & van Zeebroeck, Nicolas, 2019. "Digital technology adoption and knowledge flows within firms: Can the Internet overcome geographic and technological distance?," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    5. Elisa Giuliani, 2007. "Towards an understanding of knowledge spillovers in industrial clusters," Applied Economics Letters, Taylor & Francis Journals, vol. 14(2), pages 87-90.
    6. Emanuela Marrocu & Raffaele Paci & Stefano Usai, 2013. "Productivity Growth In The Old And New Europe: The Role Of Agglomeration Externalities," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 418-442, August.
    7. Thomas Doring & Jan Schnellenbach, 2006. "What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 375-395.
    8. Jofre-Monseny, Jordi & Marín-López, Raquel & Viladecans-Marsal, Elisabet, 2011. "The mechanisms of agglomeration: Evidence from the effect of inter-industry relations on the location of new firms," Journal of Urban Economics, Elsevier, vol. 70(2-3), pages 61-74, September.
    9. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
    10. Li, Zhenghui & Yang, Cunyi & Huang, Zhehao, 2022. "How does the fintech sector react to signals from central bank digital currencies?," Finance Research Letters, Elsevier, vol. 50(C).
    11. Gao, Ting, 2004. "Regional industrial growth: evidence from Chinese industries," Regional Science and Urban Economics, Elsevier, vol. 34(1), pages 101-124, January.
    12. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    13. Sixu Wu & Panpan Wang & Bindong Sun, 2022. "Can the Internet narrow regional economic disparities?," Regional Studies, Taylor & Francis Journals, vol. 56(2), pages 324-337, February.
    14. Luisito Bertinelli & Jehan Decrop, 2005. "Geographical agglomeration: Ellison and Glaeser's index applied to the case of Belgian manufacturing industry," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 567-583.
    15. Manuel Trajtenberg & Adam B. Jaffe & Michael S. Fogarty, 2000. "Knowledge Spillovers and Patent Citations: Evidence from a Survey of Inventors," American Economic Review, American Economic Association, vol. 90(2), pages 215-218, May.
    16. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    17. Ferreira, João J.M. & Fernandes, Cristina I. & Ferreira, Fernando A.F., 2019. "To be or not to be digital, that is the question: Firm innovation and performance," Journal of Business Research, Elsevier, vol. 101(C), pages 583-590.
    18. Kirsi Mukkala, 2004. "Agglomeration economies in the finnish manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 36(21), pages 2419-2427.
    19. Enrico Moretti, 2004. "Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions," American Economic Review, American Economic Association, vol. 94(3), pages 656-690, June.
    20. Jean‐Francois Hennart, 1988. "A transaction costs theory of equity joint ventures," Strategic Management Journal, Wiley Blackwell, vol. 9(4), pages 361-374, July.
    21. Rialti, Riccardo & Zollo, Lamberto & Ferraris, Alberto & Alon, Ilan, 2019. "Big data analytics capabilities and performance: Evidence from a moderated multi-mediation model," Technological Forecasting and Social Change, Elsevier, vol. 149(C).
    22. Lukasz Arendt, 2015. "The Digital Economy, Ict And Economic Growth In The Cee Countries," OLSZTYN ECONOMIC JOURNAL, University of Warmia and Mazury in Olsztyn, Faculty of Economic Sciences, vol. 10(3), pages 247-262, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kangxian Ji & Xiaoting Liu & Jian Xu, 2023. "Digital Economy and the Sustainable Development of China’s Manufacturing Industry: From the Perspective of Industry Performance and Green Development," Sustainability, MDPI, vol. 15(6), pages 1-23, March.
    2. Qiansheng Gong & Xiangyu Wang & Xi Tang, 2023. "How Can the Development of Digital Economy Empower Green Transformation and Upgrading of the Manufacturing Industry?—A Quasi-Natural Experiment Based on the National Big Data Comprehensive Pilot Zone ," Sustainability, MDPI, vol. 15(11), pages 1-19, May.
    3. Yanlin Sun & Shaoxiong Ma & Hao Feng, 2023. "The New Geography of Manufacturing in China: The Internet and Manufacturing Agglomeration," Sustainability, MDPI, vol. 15(17), pages 1-21, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    2. Yanlin Sun & Shaoxiong Ma & Hao Feng, 2023. "The New Geography of Manufacturing in China: The Internet and Manufacturing Agglomeration," Sustainability, MDPI, vol. 15(17), pages 1-21, August.
    3. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    4. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    5. Federico Curci, 2015. "The taller the better? Agglomeration determinants and urban structure," ERSA conference papers ersa15p991, European Regional Science Association.
    6. Aaron Chatterji & Edward Glaeser & William Kerr, 2014. "Clusters of Entrepreneurship and Innovation," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 129-166.
    7. William R. Kerr & Scott Duke Kominers, 2015. "Agglomerative Forces and Cluster Shapes," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 877-899, October.
    8. Edward L. Glaeser & William R. Kerr, 2009. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 623-663, September.
    9. Chengli Shu & Cuijuan Liu & Shanxing Gao & Mark Shanley, 2014. "The Knowledge Spillover Theory of Entrepreneurship in Alliances," Entrepreneurship Theory and Practice, , vol. 38(4), pages 913-940, July.
    10. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    11. Yuandi Wang & Lutao Ning & Jian Li & Martha Prevezer, 2016. "Foreign Direct Investment Spillovers and the Geography of Innovation in Chinese Regions: The Role of Regional Industrial Specialization and Diversity," Regional Studies, Taylor & Francis Journals, vol. 50(5), pages 805-822, May.
    12. Jiang, Kangqi & Du, Xinyi & Chen, Zhongfei, 2022. "Firms' digitalization and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 82(C).
    13. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wach," WIFO Studies, WIFO, number 58342, March.
    14. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 536-598, June.
    15. Niccolò Ghio & Massimiliano Guerini & Cristina Rossi-Lamastra, 2016. "University knowledge and the creation of innovative start-ups: an analysis of the Italian case," Small Business Economics, Springer, vol. 47(2), pages 293-311, August.
    16. Moretti, Enrico, 2011. "Local Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 14, pages 1237-1313, Elsevier.
    17. Abdullah M. Khan, 2014. "Impact of Employment Agglomeration on Patented Innovation in U.S. Manufacturing Industries from 1986 to 2008," International Journal of Business and Social Research, LAR Center Press, vol. 4(10), pages 25-42, October.
    18. repec:bof:bofrdp:urn:nbn:fi:bof-201512111472 is not listed on IDEAS
    19. Honggang Qi & Shenghe Liu & Wei Qi & Zhen Liu, 2019. "Geographical Concentration of Knowledge- and Technology-Intensive Industries and City Innovation in China," Sustainability, MDPI, vol. 11(18), pages 1-20, September.
    20. repec:zbw:bofrdp:urn:nbn:fi:bof-201512111472 is not listed on IDEAS
    21. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
    22. Junjie Hong & Shihe Fu, 2011. "Information and Communication Technologies and the Geographical Concentration of Manufacturing Industries," Urban Studies, Urban Studies Journal Limited, vol. 48(11), pages 2339-2354, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:2:p:1727-:d:1037870. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.