Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319427 
Year of Publication: 
2020
Citation: 
[Journal:] China Political Economy (CPE) [ISSN:] 2516-1652 [Volume:] 3 [Issue:] 2 [Year:] 2020 [Pages:] 259-283
Publisher: 
Emerald, Leeds
Abstract: 
Purpose By observing facts of the "reversal of agglomeration" of Chinese enterprises during the period of rapid Internet development and using a new economic geography model combined with the data of the real estate sector, this paper deduces the influence of the "reshaping mechanisms" of the Internet on China's economic geography based on the "gravitation mechanism" of the Internet that affects the enterprises and the "amplification mechanism" of the Internet that amplifies the dispersion force of house prices. Design/methodology/approach In the empirical aspect, the dynamic spatial panel data model is used to test the micromechanisms of the impact of the Internet on enterprises' choice of location and the instrumental variable method is used to verify the macro effects of the Internet in reshaping economic geography. Findings It is found that in the era of the network economy, the Internet has become a source of regional competitive advantage and is extremely attractive to enterprises. The rapidly rising house price has greatly increased the congestion cost and has become the force behind the dispersion of enterprises. China's infrastructure miracle has closed the access gap which gives full play to network externalities and promotes the movement of enterprises from areas with high house prices to areas with low house prices. Originality/value The Internet is amplifying the dispersion force of congestion costs manifested as house prices and is reshaping China's economic geography. This paper further proposes policy suggestions such as taking the Internet economy as the new momentum of China's economic development and implementing the strategy of regional coordinated development.
Subjects: 
nternet
Network economy
Agglomeration
House price
Reshaping economic geography
JEL: 
D80
R13
R30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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