Abstract:Based on the original Core-Periphery model, the new Core-Periphery model developed assumes that the labor productivity of industrial workers is no longer an exogenous variable, but related to the externality of industrial agglomeration. The developed core-periphery model not only verifies the basic properties of the original one, but also obtains some new conclusions. First, a high degree of increasing returnon production scale of industrial enterprises is conducive to industrial agglomeration.However, a low degree of increasing return on production scale of industrial enterprises will also induce re-clustering. Second, the spatial distribution of industry is dominated by two opposing forces, namely, agglomeration force and dispersion force. In general, the local market effect and the cost of living effect are the forces to promote agglomeration of industrial enterprises, while the market crowding effect lead to decentralized distribution of industrial enterprises. Third, under the spillover effects of the local and cross-border technologies, the range of trade freedom with stable symmetric structure is narrowed, while the range of trade freedom with stable core-periphery structures is expanded.