Influences of production and R&D agglomeration on productivity: Evidence from Chinese electronics firms

Chih-Hai Yang, Hui-Lin Lin and Hsiao-Yun Li

China Economic Review, 2013, vol. 27, issue C, 162-178

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.

Keywords: R&D; Agglomeration; Spillover; Productivity (search for similar items in EconPapers)
JEL-codes: C33 L14 L67 O53 R39 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:27:y:2013:i:c:p:162-178

DOI: 10.1016/j.chieco.2013.09.005

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