The equilibrium location of industrial manufacturing and laborers working in the pan-Pearl River Delta of China

Thousands of manufacturing firms clustering in China's coastal regions show signs of relocation in inland provinces because of the disadvantages of location condition and laborer's quality of life (QOL) since the opening policy. Also the signs will induce redistribution of export freight flow of seaports. This paper intends to explore the interaction relationship between firm's relocation and laborer's workplace choices from a micro-decision level. First, based on the discrete choice theory, the choice behavior models of manufacturing firms and laborers are built. Second, taken the wages as bond, the interactive equilibrium model of firm's relocation and laborer's workplace choice is built. Finally, the "communication equipment, computers, and related electronic equipment manufacturing" in pan-Pearl River Delta (PRD) region of China is taken as an example. Under equilibrium situation, in parallel with the backflow of outside laborers, the manufacturing firms will relocate in inland provinces either with fluent laborers or nearby coastal developed provinces, and the export cargo of seaports in PRD region will be largely attracted to other seaports. The results are verified with the practical activities of Foxconn in China.