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- Title
Clustering, growth and inequality in China.
- Authors
Guo, Di; Jiang, Kun; Xu, Chenggang; Yang, Xiyi
- Abstract
This study examines the effects of China's industrial clusters on regional economic growth and urban–rural income inequality within a region. A density-based index (DBI) is developed to capture the unique features of cluster development in China. From a county-level DBI panel data constructed based on firm- and county-level datasets, we find that clusters enhance local economic growth substantially. Moreover, the existence of entrepreneurial clusters (clusters mainly consist of nonstate-owned firms) helps to reduce local urban–rural income inequality by increasing the income of local rural residents. We also find that the clustering effects on growth and reduction of inequality are less significant in more urbanized regions or megacities. Identification issues are carefully addressed by deploying two-stage estimations with instrumental variables and Granger test.
- Subjects
CHINA; ECONOMIC expansion; METROPOLITAN areas; INCOME inequality; INDUSTRIAL clusters; INSTRUMENTAL variables (Statistics); VECTOR error-correction models
- Publication
Journal of Economic Geography, 2020, Vol 20, Issue 5, p1207
- ISSN
1468-2702
- Publication type
Article
- DOI
10.1093/jeg/lbz038