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The effects of factor proximity and market potential on urban manufacturing output

Listed author(s):
  • Han, Feng
  • Ke, Shanzi
Registered author(s):

    This paper derives a NEG-style model that outlines several spatial spillover channels and examines the effects of proximities to spatially distributed factor supply and market demand on Chinese urban economies. A panel dataset of 283 prefecture or higher-level cities from 2003–2013 is used for the empirical analysis. The estimation shows that proximities to government expenditure on science and technology, to professionals in science and technology, and to the domestic and foreign markets all contribute to urban manufacturing growth, while concentrations of specialized labor force and producer services in neighboring cities have negative effects. The spatial effects of factor proximities and market potentials differ in China's three regions. Surprisingly, cities in the central region have the most significant gain from spillovers of factor supply, and cities in the eastern and western regions benefit substantially from the domestic and foreign markets. Policy implications are derived from the findings.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X16300402
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    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 39 (2016)
    Issue (Month): C ()
    Pages: 31-45

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    Handle: RePEc:eee:chieco:v:39:y:2016:i:c:p:31-45
    DOI: 10.1016/j.chieco.2016.04.002
    Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

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