between on [Mismatch,between,Population,and,Industries:A,New,Perspective,on,China’s,Regional,Disparity]

　　Abstract: The mismatch between distribution of population and industries is a new perspective on studying regional disparities. This paper describes the status quo and trend of the mismatch, analyzes its formation mechanism and proposes three assumptions. Through empirical analysis, this paper concludes that the mismatch expands first and narrows later, along with economic development. Meanwhile, population migration barriers and different change in the marginal productivity of capital (mpk) expand the mismatch, while the coordinated regional development strategy contains the expansion.
　　Key words: regional disparity, mismatch, synergetic agglomeration
　　JEL classifications: R58
　　1. Introduction
　　China has achieved rapid economic growth over the past three decades, but regional development imbalance has expanded in the meantime, as reflected in the widening income gap between the eastern and inland areas1. At the space level, regional disparity is manifested in the mismatch between population and industry. For instance, an area accommodates many industries but does not gather sufficient population, or the other way around. Specifically, the match can be measured by the ratio of one region’s production share to population share. After transforming the equation we find it is actually the ratio of per-capita GRP2 to the national average.
　　Apart from being a measurement of regional disparity, mismatch itself deserves high attention because it causes loss of the space efficiency as factors flow for long distance in a large scale. Meanwhile, mismatch also implies unequal job opportunities. Where industries cluster, the unemployment rate is low, while populous areas with fewer industries face severe unemployment.
　　There are extensive studies on China’s regional disparity. Yang (1994) and Wei (1996, 1997) formed statistics of China’s regional disparity earlier. Scholars have explained how China’s regional disparity expands from different perspectives. Lin et al. (2002) pointed out that the macro policy environment which distorts the price of factors and products is the culprit, because it causes a region’s comparative economic advantage established by the current price system to depart from the local comparative advantage in the “resource structure”. Cai (2001) believes distortion of the labor market, by affecting allocation of factor resources, causes a difference in the efficiency and expands regional disparity. Some studies are made from the perspective of synergetic agglomeration of population and industries. According to Li and Fan (2003), production is constantly centralized in the eastern coast while the population is not, and it results in a highly uneven distribution of the two between eastern and other regions. They also explored the cause of such imbalance from the perspective of factor mobility, concluding that the cost of population flow is a key factor in regional disparities; without population migration barriers, production and population is distributed more synchronously and regional disparities are fewer.