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Geography of productivity: evidence from China’s manufacturing industries

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Listed:
  • Shengjun Zhu

    () (Peking University)

  • Canfei He

    () (Peking University)

  • Xinming Xia

    (Peking University)

Abstract

Empirical evidence has confirmed that the locational agglomeration of firms is associated with productivity benefits. Several competing explanations have been proposed for this association: agglomeration externalities effect, sorting effect and selection effect. This work builds on these studies and seeks to make four contributions by using a firm-level dataset on China’s manufacturing industries over the 1999–2007 period. First, it points out that this stand of literature pays insufficient attention to the possibility of adverse sorting. Second, agglomeration externalities have been decomposed to two constituting parts: inter- and intra-industry, which play different roles in the process of sorting and agglomeration. Third, this paper also points out the need to pay attention to firm heterogeneity, in terms of market orientation and ownership type. Finally, the complex role of government policies has been also examined. Econometric results support our hypotheses.

Suggested Citation

  • Shengjun Zhu & Canfei He & Xinming Xia, 2019. "Geography of productivity: evidence from China’s manufacturing industries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(1), pages 141-168, February.
  • Handle: RePEc:spr:anresc:v:62:y:2019:i:1:d:10.1007_s00168-018-0890-5
    DOI: 10.1007/s00168-018-0890-5
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    1. Heinrich, Torsten & Yang, Jangho & Dai, Shuanping, 2020. "Growth, development, and structural change at the firm-level: The example of the PR China," MPRA Paper 105011, University Library of Munich, Germany.
    2. Torsten Heinrich & Jangho Yang & Shuanping Dai, 2020. "Growth, development, and structural change at the firm-level: The example of the PR China," Papers 2012.14503, arXiv.org.

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    More about this item

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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