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Industry Relatedness, Agglomeration Externalities and Firm Survival in China

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  • Canfei He
  • Qi Guo
  • David Rigby

Abstract

The importance of agglomeration externalities for economic activities is widely recognized. Recent developments highlight the importance of industry relatedness to the performance of firms, industries and regions. This study explores the determinants of firm survival in China and tests the significance of industry relatedness using firm-level data over the period 1999-2007. Industry relatedness is developed from the co-occurrence analysis of paired industries. Results based on Cox regression models show that firms benefiting from industry relatedness and governmental supports are more likely to survive. However, the influence of relatedness varies across industries and provinces. This study highlights the significant influence of local forces on firm dynamics and enriches our understanding of regional industrial restructuring in China.

Suggested Citation

  • Canfei He & Qi Guo & David Rigby, 2015. "Industry Relatedness, Agglomeration Externalities and Firm Survival in China," Papers in Evolutionary Economic Geography (PEEG) 1528, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2015.
  • Handle: RePEc:egu:wpaper:1528
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    File URL: http://econ.geo.uu.nl/peeg/peeg1528.pdf
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    Keywords

    Industry relatedness; Agglomeration Externalities; Firm Survival; China;

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