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Industrial agglomeration and firm size: Evidence from China

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  • Li, Dongya
  • Lu, Yi
  • Wu, Mingqin
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Abstract

This paper, by using annual surveys of manufacturing firms from 1998 to 2005 in China, first documents a positive correlation between industrial agglomeration and firm size, which is previously found in developed economies. Next, by using the instrumental variable estimations, we identify that industrial agglomeration has a positive and statistically significant causal impact on firm size. Finally, we find that firms are more likely to become larger by locating with a number of larger firms than with a larger number of firms.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 1-2 ()
Pages: 135-143

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Handle: RePEc:eee:regeco:v:42:y:2012:i:1:p:135-143

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Keywords: Industrial agglomeration; Firm size; Localization economies; Urbanization economies;

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