Industrial agglomeration and firm size: Evidence from China

Dongya Li, Yi Lu and Mingqin Wu

Regional Science and Urban Economics, 2012, vol. 42, issue 1-2, 135-143

Abstract: This paper, by using annual surveys of manufacturing firms from 1998 to 2005 in China, first documents a positive correlation between industrial agglomeration and firm size, which is previously found in developed economies. Next, by using the instrumental variable estimations, we identify that industrial agglomeration has a positive and statistically significant causal impact on firm size. Finally, we find that firms are more likely to become larger by locating with a number of larger firms than with a larger number of firms.

Keywords: Industrial agglomeration; Firm size; Localization economies; Urbanization economies (search for similar items in EconPapers)
JEL-codes: D21 L25 R12 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:42:y:2012:i:1:p:135-143

DOI: 10.1016/j.regsciurbeco.2011.07.003

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