Abstract:This paper construct a general equilibrium model of industrial location, though which we derive an empirical model. By taking cement industry in Northwest China as the case, we estimate the model by adopting real statistics, and then the key parameter had been achieved. After that, we are able to simulate the impact of technological progress on location dynamics. It indicates that, technological progress will decreases operating cost, and it turns to be profitable for firms to expand sale size as well as production. In the perspective of regions, technological progress would induce server spatial competition across regions. In long term, technological progress would result in higher spatial concentration of industry. Regions with convenient market access would still be the destinations where lots of firms located, while, other regions would have to be more peripheral, some regions located next to hot pot regions would lost lots of firms which mainly would relocate to core regions. This paper indicates that technological progress inevitably has significant impact on industrial location. It implies the importance of investigation on intuition of economics geography based on technological progress perspective.