Geographic concentration and vertical disintegration: Evidence from China

Ben Li and Yi Lu

Journal of Urban Economics, 2009, vol. 65, issue 3, 294-304

Abstract: Existing theoretical literature predicts that geographic concentration encourages vertical disintegration of firms. Nevertheless, empirical evidence of this prediction is limited, especially in developing countries. Using data on manufacturing firms from China, this paper documents a positive correlation between geographic concentration and vertical disintegration. Additionally, this paper uses the instrumental variable approach to address the issue of endogeneity and finds that geographic concentration has a positive causal effect on vertical disintegration.

Keywords: Geographic; concentration; Vertical; disintegration; Outsourcing; China (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (39)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:65:y:2009:i:3:p:294-304

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