Park Economy and Economic Development Lecture Series: Lecture 6 | Research Methodology of Park Economy
On the evening of December 16, 2019, the 6th session of the Park Economy and Economic Development Lecture Series titled the “Research Methodology of Park Economy” was held at Conference Room 205 of the Central Main Building of Tsinghua University. Wang Yong, Associate Professor, Institute of Economics, School of Social Sciences, Tsinghua University, delivered the speech, which was attended by doctoral students from the Institute of International and Area Studies (IIAS) of Tsinghua University. Prof. Wang elaborated the research methodology of park economy from three aspects, namely case studies, theoretical studies and data processing methods.
He started with the cases of three economists, i.e., Ronald Coase, Oliver Williamson and Douglas North. He specifically pointed out that Ronald Coase doesn’t not use too many mathematical formulas in economics research and is known famous for case studies, with a very high circulation rate. Oliver Williamson’s research inherits Coase’s theory, while better answering to the question of the source of transaction costs. In comparison, Douglas North has solved the question of the source of transaction costs from an institutional perspective and examines the institution of a country. Starting from the point that these three economists are all good at using typical cases to support their respective theories, Prof. Wang explained that it is highly important to grasp the key variables behind various typical cases when studying park economy, which is perfect for case study. However, before doing so, it is essential to be extremely familiar with a certain theory, and also pay attention to whether there are relevant factors in the case that support or challenge the existing theory.
In the second part, Prof. Wang further introduced the theoretical methodology of Paul Krugman, Jean Tirole and Paul Romer. He emphasized that when studying park economy, it is critical to pay attention to whether there are existing theories supporting the research. When exploring new economic geography, Paul Krugman noticed the phenomenon that many economic parks trade products that are not produced locally, which led to the theory of “increasing returns to scale”. He also mentioned that China had many similar park economic industries. Prof. Wang further highlighted that in a country’s economic development, sometimes the institution will bring obstacles to a certain extent, in which case, the adoption of the special economic zone system is particularly important. Prof. Romer has made pioneering contributions to the new growth theory, which plays a guiding role in the study of park economy.
The third part focused on data processing methods and covered descriptive statistics, statistical inference and experimental economics. Prof. Wang examined the theories of Reinhard Zelten, Abigail Banagher, Esther Duflo, Michael Kramer and Angus Deaton one by one. He mentioned that descriptive statistics refers to a variety of activities that use tabulation and classification, graphics and calculation of summary data to describe data attributes. Descriptive statistical analysis shall carry out a statistical description of the relevant data of all variables in the population, mainly including frequency analysis, central tendency analysis, dispersion analysis, distribution and some basic statistical graphics. Econometrics is one of the key vehicles to verify park economy. Finally, Prof. Wang cited that the randomized and controlled methodology of experimentation in experimental economics is to randomly designate a group of samples as the test group, and compare their results to that of the samples who are randomly designated as the control group for analysis. This technique is reliable, innovative and realistic.
In the Q&A session at the end of the event, Prof. Wang responded to the questions from the audience. He pointed out that there are many transactional behaviors in the same park. Because they are all in the same park, the transaction costs of all the parties will decrease, and a bilateral market will be formed. He added that if companies are delegated to develop industrial parks, it is secondary to consider whether the companies will engage in additional commissioning , which will cause moral hazards, because it is difficult for companies to return the investments at once. For example, companies will rent the sites of the park in batches and make more profits by providing commercial services and in turn generating trading opportunities. At last, Prof. Wang concluded that park economy is an important part of China’s economic growth. In the existing economic parks in China, there are often two structures. One is at the national level, which performs administrative duties. And the other is the companies in the park, which do business with companies outside the park.