Technological Progress, Spatial Competition and Industrial Location: Estimation and Predictions of Cement Industry in Northwest China

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.