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Economic Transition and Changing Location of Manufacturing Industry in China: A Study of the Yangtze River Delta

Jiawei Wu (), Yehua Dennis Wei (), Qizhai Li () and Feng Yuan ()
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Jiawei Wu: Key Laboratory of Watershed Geographic Sciences, Nanjing Institute of Geography and Limnology, Chinese Academy of Sciences, Nanjing 210008, China
Yehua Dennis Wei: Key Research Institute of Yellow River Civilization and Sustainable Development & Collaborative Innovation Center for Yellow River Civilization of Henan Province, Henan University, Kaifeng 475001, China
Qizhai Li: LSC, NCMIS, Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China
Feng Yuan: Key Laboratory of Watershed Geographic Sciences, Nanjing Institute of Geography and Limnology, Chinese Academy of Sciences, Nanjing 210008, China

Sustainability, 2018, vol. 10, issue 8, 1-28

Abstract: Industrial restructuring is widely considered an important force in regional economic growth and sustainable development. With increased globalization and economic transition, a dramatic industrial restructuring has been taking place in China. Applying geographically weighted shift-share model (GW-SSM) and geographically and temporally weighted regression model (GTWR), we analyze (re)location dynamics and determinants of the manufacturing industry in the Yangtze River Delta (YRD) from 1999 to 2013, with particular attention to the implications of economic transition and institutional restructuring. We find that high-tech and capital-intensive manufacturing industries agglomerated in coastal cities, while labor-intensive and resource-based sectors have become spatially more dispersed to peripheral areas. We also find that the development of service and high-tech industries, rising labor costs, and more strict environmental regulations have facilitated the geographic dispersion of labor- and pollution-intensive industries. Moreover, regions with advantages in intermediate goods, preferential policies, and urbanization economies are attractive to capital- and technology-intensive manufacturing industries. Our research suggests that development policies should be tailored to specific regions to promote local production and innovative networks and make manufacturing industries more competitive.

Keywords: globalization; industrial location; GW-SSM; Yangtze River Delta; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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