Cluster-based industrialization in China: Financing and performance

Cheryl Long and Xiaobo Zhang

Journal of International Economics, 2011, vol. 84, issue 1, 112-123

Abstract: China's rapid industrialization despite the lack of a well developed financial system seems to defy the conventional thinking on the role of finance in development. This paper tries to explain the puzzle from the clustering point of view. Based on firm-level data from two recent censuses, we find that within industrial clusters: finer division of labor lowers the capital barriers to entry; closer proximity makes the provision of trade credit among firms easier. With less reliance on external financing, more small firms emerge within clusters, leading to higher levels of export and total factor productivity thanks to the resultant more fierce competition.

Keywords: Clustering; Industrialization; Finance; Export; Productivity; China (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (88)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022-1996(11)00028-6
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Cluster-based industrialization in China: Financing and performance (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:84:y:2011:i:1:p:112-123

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().