Research on the Economic and Environmental Effects of Internet Development on Remolding the Spatial Agglomeration of Manufacturing Industry: Empirical Evidence from Micro-geographic Data of Manufacturing Industry

Abstract: The scale advantage of clusters is an important source of long-term competitive advantage for the real economy of a region, but the convenience and efficiency of the Internet makes it seem unnecessary for enterprises to integrate into the “spatial collective”. How to balance the advantages of regional clusters and the tendency of enterprises to “leave” is another important issue for the high-quality development of regional economy in the new era. Based on the fact that the spatial agglomeration of manufacturing industries has degraded in the Internet era, this paper uses the latitude and longitude data of all manufacturing enterprises in China from 2013 to 2019 to re-measure the spatial agglomeration of regional manufacturing enterprises, and takes 231 prefecture-level cities as the research samples to analyse the reshaping mechanism of the Internet development on the spatial agglomeration of manufacturing industries and further explore its resulting economic.The study finds that: (1) The development of the Internet has reduced the crowding effect of manufacturing spatial agglomeration, thus weakening the scale of manufacturing spatial agglomeration. (2) There is heterogeneity in the reshaping of manufacturing spatial agglomeration by the Internet, and the weakening effect of the Internet on manufacturing spatial agglomeration becomes more significant as the development of the Internet progresses. This weakening effect is most obvious in the eastern region, followed by the central region, and not significant in the western region. (3) The Internet reshapes the spatial agglomeration of manufacturing industries and generally promotes the growth of total factor productivity in cities while mitigating the intensification of environmental pollution.From the perspective of spatial agglomeration in the context of the digital economy, this study provides policy insights for promoting the deep integration of the digital economy with the real economy and achieving long-term balanced regional development.

Recommended citation: Junjie Zhen*, Bo Shi, Yubao Wang. (2024). "Research on the Economic and Environmental Effects of Internet Development on Remolding the Spatial Agglomeration of Manufacturing Industry: Empirical Evidence from Micro-geographic Data of Manufacturing Industry." China Journal of Economics (in Chinese). 11.
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