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Industrial agglomeration and firm size: Evidence from China

  • Li, Dongya
  • Lu, Yi
  • Wu, Mingqin
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This paper, by using annual surveys of manufacturing firms from 1998 to 2005 in China, first documents a positive correlation between industrial agglomeration and firm size, which is previously found in developed economies. Next, by using the instrumental variable estimations, we identify that industrial agglomeration has a positive and statistically significant causal impact on firm size. Finally, we find that firms are more likely to become larger by locating with a number of larger firms than with a larger number of firms.

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File URL: http://www.sciencedirect.com/science/article/pii/S0166046211000937
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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 1-2 ()
Pages: 135-143

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Handle: RePEc:eee:regeco:v:42:y:2012:i:1:p:135-143
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