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| 1 |
ID:
106232
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| Publication |
2011.
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| Summary/Abstract |
Is the spatial concentration of manufacturing activity able to enhance firm-level productivity? This question is particularly relevant to production in China, which has a huge territory and population, but a skewed distribution in terms of urban-rural development. This paper aims to examine the dynamics of industrial agglomeration and the impact of agglomeration on firm-level productivity in China's textile industry by using a firm-level panel dataset from 2000 to 2005. First, the average value of the Ellison-Glaeser (EG) index (city level) is found to be approximately 0.00019. Moreover, the calculated city EG index of spatial concentration for each year exhibits a decreasing trend of spatial agglomeration for garments and other fiber products, but an increasing trend for the textile industries' agglomeration in China. The above findings are similar to the findings of Lu and Tao (2009). Secondly and importantly, this study finds an inverted U-shape relationship between agglomeration and productivity. It suggests that while industrial agglomeration enhances firms' productivity, agglomeration diseconomies may appear if the degree of agglomeration is too high.
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| 2 |
ID:
124554
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2013.
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| Summary/Abstract |
As China adopts a government-supported agglomeration model to develop high-tech industries, it is crucial to examine whether the spatial concentration of manufacturing and R&D activities enhance firm-level productivity. Based on a panel dataset of Chinese electronics firms from 2005 to 2007, the calculated Ellison-Glaeser (EG) index indicates that both production and R&D activities are highly spatially concentrated. Crucially, we find that production agglomeration has a positive relationship with firms' productivity, especially for smaller firms. In contrast, R&D agglomeration seems to negatively relate with productivity. It implies that the possible congestion effect and/or free rider problems erode the benefit derived from knowledge spillovers.
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