Clusters as an Instrument for Industrial Policy: The Case of China

Xiaobo Zhang

Chapter 4.1 in The Industrial Policy Revolution I, 2013, pp 227-243 from Palgrave Macmillan

Abstract: Abstract Developing countries face a long list of seemingly insurmountable obstacles to industrialization, including but not limited to underdeveloped financial systems and a lack of formal institutions. Since pooled resources are necessary to build factories and to purchase manufacturing equipment, financial development has been widely regarded as a key instrument for industrialization (Goldsmith, 1969; Raj an and Zingales, 1998). Entrepreneurs are afraid to make business deals unless the underlying contracts are trustworthy. Thus building a sound legal system is also crucial for ensuring the functioning of market economy (North, 1990). A common view among donors and policy makers is the necessity of creating these fundamental institutions.

Keywords: Industrial Policy; Trade Credit; Industrial Cluster; Credit Constraint; Wealth Level (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-137-33517-3_15

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DOI: 10.1057/9781137335173_15

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