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A proximity-based measure of industrial clustering

Jianqing Ruan and Xiaobo Zhang ()

No 1468, IFPRI discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: An industrial cluster is a locality with a high concentration of firms in related businesses. Although relatedness and concentration are the two defining features of an industrial cluster, the commonly used measures of clustering often fail to simultaneously capture both dimensions. Based on the product space literature, we first compute the degree of relatedness based on the concept of industrial proximity. Next, we develop a clustering index that takes into account both proximity and concentration. Finally, we calculate this new proximity-based index using the 1995 China Industrial Census and the 2004 and 2008 China Economic Census. The new index predicts China’s top 100 industrial clusters much more accurately than existing cluster measures.

Keywords: economic development; industrial sector; industrial development; markets; regulations; economic policies (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cse, nep-geo, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:fpr:ifprid:1468

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