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Impact of industrial linkages on firm performance in development zones

  • Hu, Zhining
  • Zheng, Jianghuai
  • Wang, Jialing
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    This article investigates the effect of industrial linkages on firm performance in Chinese development zones, using Jiangsu Province as a case study. An ordered response model based on the dependent variable being ordinal was developed. The empirical results reveal an insignificant relationship between industrial linkages and firm performance. Our interpretation of this finding mainly lies with the global and domestic challenges that have changed the way participating firms operate and organize in the development zones of Jiangsu. When many other economic factors take precedence over industrial linkages in driving superior firm performance, firms feel it less important to get closer to their suppliers or customers, therefore weakening the impact of industrial linkages. Although this article primarily focuses on development zones in Jiangsu Province, the findings and discussion will provide insights for other development zones in China that may be, reviewing their development strategies because most of them have similar development problems.

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    File URL: http://mpra.ub.uni-muenchen.de/33127/1/MPRA_paper_33127.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33127.

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    Date of creation: Mar 2011
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    Publication status: Published in The Chinese Economy 2.44(2011): pp. 78-105
    Handle: RePEc:pra:mprapa:33127
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    1. Gashawbeza Bekele & Randall Jackson, 2006. "Theoretical Perspectives on Industry Clusters," Working Papers Working Paper 2006-05, Regional Research Institute, West Virginia University.
    2. Jones, Derek C. & Kalmi, Panu & Mygind, Niels, 2003. "Choice of ownership structure and firm performance: Evidence from Estonia," BOFIT Discussion Papers 7/2003, Bank of Finland, Institute for Economies in Transition.
    3. Rasiah, Rajah, 1994. "Flexible Production Systems and Local Machine-Tool Subcontracting: Electronics Components Transnationals in Malaysia," Cambridge Journal of Economics, Oxford University Press, vol. 18(3), pages 279-98, June.
    4. Hall, B.H., 1999. "Innovation and Market Value," Economics Papers 1999-w3, Economics Group, Nuffield College, University of Oxford.
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    6. Taye Mengistae, 2006. "Competition and entrepreneurs' human capital in small business longevity and growth," Journal of Development Studies, Taylor & Francis Journals, vol. 42(5), pages 812-836.
    7. repec:cup:cbooks:9780521117562 is not listed on IDEAS
    8. Madani, Dorsati, 1999. "A review of the role and impact of export processing zones," Policy Research Working Paper Series 2238, The World Bank.
    9. Heij, Christiaan & de Boer, Paul & Franses, Philip Hans & Kloek, Teun & van Dijk, Herman K., 2004. "Econometric Methods with Applications in Business and Economics," OUP Catalogue, Oxford University Press, number 9780199268016, March.
    10. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    11. Danny Miller, 1991. "Stale in the Saddle: CEO Tenure and the Match Between Organization and Environment," Management Science, INFORMS, vol. 37(1), pages 34-52, January.
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