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Industrial clusters, networks and resilience to the Covid-19 shock in China

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  • Dai, Ruochen
  • Mookherjee, Dilip
  • Quan, Yingyue
  • Zhang, Xiaobo

Abstract

We examine how Covid-19 resilience of Chinese firms varied with a cluster index (measuring spatial agglomeration of firms in related industries) at the county level. Two data sources are used: entry flows of newly registered firms in the entire country, and an entrepreneur sample survey regarding operation of existing firms. Both show greater resilience in counties with a higher cluster index, after controlling for industry dummies and local infection rates, besides county and time dummies in the entry data. Reliance of clusters on high density informal entrepreneur hometown networks and closer proximity to suppliers and customers help explain these findings.

Suggested Citation

  • Dai, Ruochen & Mookherjee, Dilip & Quan, Yingyue & Zhang, Xiaobo, 2021. "Industrial clusters, networks and resilience to the Covid-19 shock in China," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 433-455.
    • Handle: RePEc:eee:jeborg:v:183:y:2021:i:c:p:433-455
    DOI: 10.1016/j.jebo.2021.01.017
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    3. Jin, Pengfei & Wang, Saige & Meng, Zheng & Chen, Bin, 2023. "China's lithium supply chains: Network evolution and resilience assessment," Resources Policy, Elsevier, vol. 87(PB).
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    5. Chen, Joy & Cheng, Zijun & Gong, Robin Kaiji & Li, Jinlin, 2022. "Riding out the COVID-19 storm: How government policies affect SMEs in China," China Economic Review, Elsevier, vol. 75(C).
    6. Sierk Horn & Tomoki Sekiguchi & Matthias Weiss, 2021. "Thrown off track? Adjustments of Asian business to shock events," Asian Business & Management, Palgrave Macmillan, vol. 20(4), pages 435-455, September.
    7. Sirirat Sae Lim & Hong Ngoc Nguyen & Chia-Li Lin, 2022. "Exploring the Development Strategies of Science Parks Using the Hybrid MCDM Approach," Sustainability, MDPI, vol. 14(7), pages 1-29, April.
    8. Guo, Feng & Huang, Yiping & Wang, Jingyi & Wang, Xue, 2022. "The informal economy at times of COVID-19 pandemic," China Economic Review, Elsevier, vol. 71(C).
    9. An-Ting Cheng, 2023. "Spatial Concentration in Relation to Industrial Resilience," Sustainability, MDPI, vol. 15(4), pages 1-19, February.
    10. An-Ting Cheng, 2023. "Spatial Concentration of Health Industry under COVID-19," IJERPH, MDPI, vol. 20(5), pages 1-19, March.
    11. Díaz de Astarloa, Bernardo & Tacsir, Ezequiel, 2022. "Cluster Initiatives and Economic Resilience: Evidence from a Technology Cluster in Argentina," IDB Publications (Working Papers) 12557, Inter-American Development Bank.
    12. Ge, Houtian & Goetz, Stephan J. & Cleary, Rebecca & Yi, Jing & Gómez, Miguel I., 2022. "Facility locations in the fresh produce supply chain: An integration of optimization and empirical methods," International Journal of Production Economics, Elsevier, vol. 249(C).
    13. Yu, Yu & Ma, Daipeng & Zhu, Weiwei, 2023. "Resilience assessment of international cobalt trade network," Resources Policy, Elsevier, vol. 83(C).
    14. Cong, Lin William & Yang, Xiaohan & Zhang, Xiaobo, 2021. "SMEs Amidst the Pandemic and Reopening: Digital Edge and Transformation," Applied Economics and Policy Working Paper Series 317045, Cornell University, Department of Applied Economics and Management.
    15. Wu, Jianxin & Zhan, Xiaoling & Xu, Hui & Ma, Chunbo, 2023. "The economic impacts of COVID-19 and city lockdown: Early evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 151-165.
    16. Feng, Qu & Wu, Guiying Laura & Yuan, Mengying & Zhou, Shihao, 2022. "Save lives or save livelihoods? A cross-country analysis of COVID-19 pandemic and economic growth," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 221-256.
    17. Nylund, Petra A. & Amores-Bravo, Xavier & Ferràs-Hernández, Xavier & Brem, Alexander, 2023. "Crisis as a catalyst of idle innovation ecosystems: Evidence from ecosystem exaptation of a water partnership," Technological Forecasting and Social Change, Elsevier, vol. 197(C).

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    More about this item

    Keywords

    Clusters; Covid-19; China; Firms; Social networks;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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