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Spatial concentration of manufacturing firms in China

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  • Steven Brakman
  • Harry Garretsen
  • Zhao Zhao

Abstract

Applying the methodology developed by Duranton and Overman (2005, 2008), we analyze localization and dispersion of firms in China. Using a unique and detailed dataset on manufacturing firms in China, we are able to follow the changes in location patterns of firms between 2002 and 2008. Our analysis shows that firms in China are more localized than in the UK or Japan. Localization is comparable to that in the US, and takes place at relative small scales that are consistent with the size of Chinese cities. Localization increases rapidly, even in the relative short period between 2002 and 2008, especially new entrants localize. Private firms, firms from Hong-Kong, Macao and Taiwan, and foreign firms are more localized than state-owned firms. Our findings are consistent with the notion that China is increasingly liberalizing its economy, enabling (profit seeking) manufacturing firms to benefit from agglomeration economies.
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  • Steven Brakman & Harry Garretsen & Zhao Zhao, 2017. "Spatial concentration of manufacturing firms in China," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 179-205, March.
    • Handle: RePEc:bla:presci:v:96:y:2017:i::p:s179-s205
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    File URL: http://hdl.handle.net/10.1111/pirs.12195
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    Cited by:

    1. Stephen Sheppard & Dan Zhao, 2016. "Regional Concentration of Industry in China: Decentralised Choices or a Central Plan?," Department of Economics Working Papers 2016-17, Department of Economics, Williams College.
    2. Andrea Ascani & Alessandra Faggian & Sandro Montresor, 2021. "The geography of COVID‐19 and the structure of local economies: The case of Italy," Journal of Regional Science, Wiley Blackwell, vol. 61(2), pages 407-441, March.
    3. Shiwei Hu & Steven Brakman & Charles van Marrewijk, 2014. "Smart Cities are Big Cities - Comparative Advantage in Chinese Cities," CESifo Working Paper Series 5028, CESifo.
    4. A. Tidu & S. Usai & Frederick Guy, 2021. "Agglomeration in manufacturing and services: an experimental application of a distance-based measure to Sardinia," Working Paper CRENoS 202110, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    5. John Gibson & Chao Li, 2018. "The “Belt and Road Initiative†and comparative regional productivity in China," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(2), pages 168-181, May.
    6. S. Usai & Frederick Guy & A. Tidu, 2022. "Measuring spatial dispersion: an experimental test on the M-index," Working Paper CRENoS 202206, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    7. Xiaoxiang Zhang & Jing Yao & Katarzyna Sila-Nowicka & Chonghui Song, 2021. "Geographic concentration of industries in Jiangsu, China: a spatial point pattern analysis using micro-geographic data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(2), pages 439-461, April.

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • L70 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - General

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