Industrial Clusters in the Long Run: Evidence from Million-Rouble Plants in China

Stephan Heblich, Marlon Seror, Hao Xu and Yanos Zylberberg

No 30744, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We identify negative spillovers exerted by large, successful manufacturing plants on other local production facilities in China. A short-lived alliance between the U.S.S.R. and China led to the construction of 150 "Million-Rouble plants" in the 1950s. Our identification strategy exploits the ephemeral geopolitical context and the relative position of allied and enemy airbases to isolate exogenous variation in plant location decisions. We find a boom-and-bust pattern in hosting counties: treated counties are twice as productive as control counties in 1982, but 30% less productive in 2010. The average other establishment in treated counties is unproductive, does not innovate, and charges high markups. We find that (over)specialization limits technological spillovers. This prevents the emergence of new industrial clusters and leads to a flight of entrepreneurs.

JEL-codes: J24 N95 R11 R50 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-cna, nep-ent, nep-geo, nep-his, nep-lma and nep-ure
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Related works:
Working Paper: Industrial clusters in the long run: Evidence from Million-Rouble plants in China (2019)
Working Paper: Industrial clusters in the long run: evidence from Million-Rouble plants in China (2019)
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