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Marshallian Sources of Relatedness and Their Effects on Firm Survival and Subsequent Success in China

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  • Anthony Howell

Abstract

Relying on a large panel of Chinese firms, this article attempts to investigate the effects of technological relatedness on firm survival and subsequent success (e.g., profits and productivity). The results show that related establishments that colocate together outperform their counterparts located elsewhere, although it is not clear whether these findings are due to the presence of externalities or alternative explanations. To explore this issue, several proxies for the Marshallian sources of relatedness are further developed to better reveal the underlying mechanisms that drive relatedness. The findings show that technological proximity helps to respectively reduce the costs of moving goods, people, and ideas, thus providing strong support for Marshallian theories of agglomeration. The ownership structure of the firm matters, however. Specifically, wholly privately owned enterprises are more successful than firms where the state is a minority shareholder at converting technologically related spillovers into higher profits and higher-efficiency gains.

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  • Anthony Howell, 2017. "Marshallian Sources of Relatedness and Their Effects on Firm Survival and Subsequent Success in China," Economic Geography, Taylor & Francis Journals, vol. 93(4), pages 346-366, August.
    • Handle: RePEc:taf:recgxx:v:93:y:2017:i:4:p:346-366
    DOI: 10.1080/00130095.2017.1308223
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    Cited by:

    1. Grashof, Nils, 2021. "Putting the watering can away –Towards a targeted (problem-oriented) cluster policy framework," Research Policy, Elsevier, vol. 50(9).
    2. Peixin Li & Lixia Li & Yichun Xie & Xueliang Zhang, 2021. "Investigating the effects of market segmentation on firm survival and their heterogeneities in China," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2614-2634, December.
    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).
    4. Karim Badr & Reham Rizk & Chahir Zaki, 2019. "Firm productivity and agglomeration economies: evidence from Egyptian data," Applied Economics, Taylor & Francis Journals, vol. 51(51), pages 5528-5544, November.
    5. Guo, Di & Jiang, Kun & Xu, Chenggang & Yang, Xiyi, 2023. "Geographic clusters, regional productivity and resource reallocation across firms: Evidence from China," Research Policy, Elsevier, vol. 52(2).

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