Study on the Correlation of Institutional Innovation, Development of the SMEs Clusters and Urbanization in Zhejiang, China

摘要

This paper explores the relationship between small and medium-sized enterprises (SMEs) clusters and urbanization in Zhejiang, China. Granger causality tests show that SMEs clusters is the Granger causality to urbanization in a long term. Urbanization makes great impact on workforces clustering in Zhejiang. Analyzing the mechanism of correlation between the development of SMEs clusters and urbanization, this paper reveals the institutional underpinnings and obstacles of these two variables in Zhejiang. Suggestions on institutional innovation may provide recommendations to promote the transformation and upgrading of the economy in Zhejiang.