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The impacts of highways on firm size distribution: Evidence from China

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  • Jiangteng Zhou

Abstract

This paper examines the impact of highway construction on the size distribution of manufacturing firms using Chinese firm and highway network data. I construct instrumental variables using historical and counterfactual road approaches to identify the causal effects of highway construction. I find that highway construction can increase firm size dispersion and market concentration. Areas near highways have a higher number of firms, more outsourcing activities, and more large firms; while areas further from highways have a higher share of new entry firms.

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  • Jiangteng Zhou, 2023. "The impacts of highways on firm size distribution: Evidence from China," Growth and Change, Wiley Blackwell, vol. 54(2), pages 482-506, June.
    • Handle: RePEc:bla:growch:v:54:y:2023:i:2:p:482-506
    DOI: 10.1111/grow.12660
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