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ID:
143433
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| Summary/Abstract |
This paper conducts an in-depth evaluation on the role of industrial agglomeration in productivity growth of China's industrial sector by exploiting large dataset of manufacturing firms active in 176 three-digit industries and in 2860 counties. We also complement our analysis with the 2004 Census data to capture the agglomeration of small firms. Unlike previous studies that often focused on specific industries, we assess the impact of agglomeration in a comprehensive range of industries and extend the scope of analysis to upstream industries as well. Moreover, we explore how the ownership of Chinese firms shapes their ability to benefit from agglomeration effect as well as to act as the source of externality. We find that congestion and fiercer competition offset the benefits of agglomeration for firms operating within agglomerated regions. On the other hand, a co-location of large firms contributes significantly to productivity. We also find a more important contribution from the agglomeration of upstream industries than from that of the same industry. Private enterprises are the primary source of agglomeration effects especially in upstream industries, whereas their productivity is boosted most by the agglomeration of other private enterprises. We reckon that industrial agglomeration contributed up to 14% of the productivity growth in China's industrial sector between 2000 and 2007.
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| 2 |
ID:
143412
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| Summary/Abstract |
Knowledge spillover from the agglomeration of exporters can reduce the initial costs of exporting faced by other firms and thereby facilitate exports. We use a large dataset of Chinese manufacturing firms to assess whether industrial agglomeration lowers the minimum productivity level required for exporting and whether it increases a firm's probability of exporting. Semi-parametric quantile regressions reveal that the productivity advantage of exporters against non-exporters is markedly smaller in agglomerated regions. Furthermore, a parametric estimation of an export entry model indicates that the agglomeration of incumbent exporters contributes significantly to export participation, although its magnitude is limited. These spillover effects are generated not only by the agglomeration of exporting foreign invested firms (FIFs), but also, more importantly, by that of indigenous Chinese exporters. In fact, the agglomeration of exporting FIFs only contributes to the export entry of FIFs.
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