Abstract: In the process of regional integration, industrial agglomeration and regional specialization are correlated to each other and together are the basis for inter-regional division of labor. In this paper, the“shift-share” model and separated specialization indices for dominant and non-dominant industries are used in the analysis of the correlations between spatial agglomeration and expansion of manufacturing industries as well as the levels of industrial specialization in different parts of Jiangsu Province from 1984 to 2008. The analysis indicates that there is an inverted U-shaped relationship between the dynamic of industrial distribution (agglomeration and expansion) and the level of regional integration, consistent with New Economic Geography models. In addition, deepening of inter-regional division of labor doesn’t synchronize with regional integration; Regional specialization shows different characteristics at different stages of regional integration. In the case study of Jiangsu Province, for example, when the level of regional integration is relatively low, the specialization indices in central and peripheral regions are relatively high due to industrial agglomeration, coexisting with so-called“pseudo division of labor”phenomenon, caused by excessive agglomeration in the central region. When the level of regional integration increases, the central region, limited by the environmental resources, may utilize its advanced industrial basis and become the first to embark on an upgraded path and deepen the specialization, while the peripheral regions, lagged behind and eager to catch up, normally have few choices of industries, and the regions’ specialization levels are rather reducing during certain time period. The reason behind this is that the peripheral regions have to accept a large number of non-dominant industries, some of which are the ones with their productivities falling behind, being eliminated by the central region, using obsolete technologies, and/or causing serious pollutions. All of this indicates that to some extent the peripheral regions may have to take the same old route of“pollute first and then clean up later”that the central region has already gone through.

Key words: Jiangsu Province, manufacturing industry agglomeration, pseudo-division of labor, regional specialization