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Industry relatedness and new firm survival in China: do regional institutions and firm heterogeneity matter?

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  • Qi Guo
  • Shengjun Zhu
  • Canfei He

Abstract

Recent studies in evolutionary economic geography (EEG) highlight the key role of industry relatedness and cognitive proximity in boosting firm performance using data from developed countries. This paper explores the effect of industry relatedness on new firm survival in China by using a firm-level dataset for the 1999–2008 period. Based on survival models, it contributes to the ongoing debate by pointing out that new firms that are highly related to local industries have a lower failure rate, and the effect of industry relatedness is inflected by regional institutions and firm attributes. Industry relatedness occurs more effectively in the market-oriented regions but less effectively in regions with strong economic and political incentives of local governments.

Suggested Citation

  • Qi Guo & Shengjun Zhu & Canfei He, 2018. "Industry relatedness and new firm survival in China: do regional institutions and firm heterogeneity matter?," Post-Communist Economies, Taylor & Francis Journals, vol. 30(6), pages 735-754, November.
    • Handle: RePEc:taf:pocoec:v:30:y:2018:i:6:p:735-754
    DOI: 10.1080/14631377.2018.1443253
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    Cited by:

    1. Mario A. Maggioni & Emanuela Marrocu & Teodora Erika Uberti & Stefano Usai, 2023. "The role of localised, recombinant and exogenous technological change in European regions," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2301, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    2. Fandi Yang & Peng Yuan & Gongxiong Jiang, 2022. "Knowledge Spillovers, Institutional Environment, and Entrepreneurship: Evidence from China," Sustainability, MDPI, vol. 14(22), pages 1-27, November.
    3. Cheng, Ruiqi & Yuan, Peng & Jiang, Gongxiong, 2023. "Growth, agglomeration externalities, and survival: Evidence from Chinese manufacturing start-ups," Journal of Business Research, Elsevier, vol. 154(C).

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