Papers in Evolutionary Economic Geography

September 8, 2015

# 15.28 Industry Relatedness, Agglomeration Externalities and Firm Survival in China

Filed under: 2015 — Tags: , , , — mattehartog @ 3:43 pm

Canfei He, Qi Guo, David Rigby

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The importance of agglomeration externalities for economic activities is widely recognized. Recent developments highlight the importance of industry relatedness to the performance of firms, industries and regions. This study explores the determinants of firm survival in China and tests the significance of industry relatedness using firm-level data over the period 1999-2007. Industry relatedness is developed from the co-occurrence analysis of paired industries. Results based on Cox regression models show that firms benefiting from industry relatedness and governmental supports are more likely to survive. However, the influence of relatedness varies across industries and provinces. This study highlights the significant influence of local forces on firm dynamics and enriches our understanding of regional industrial restructuring in China.

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