Publication Type
Journal Article
Version
acceptedVersion
Publication Date
7-2022
Abstract
This paper quantifies industry-specific spatial attenuation of agglomeration economies by taking advantage of unique geocoded administrative data on the universe of Chinese manufacturing firms. The estimates of industry-level attenuation speed further allow us to systematically assess the goodness of fit of various spatial decay functional forms and to evaluate the micro-foundations that govern the decay patterns across industries. We obtain three main findings. First, agglomeration spillovers attenuate by about 90 percent on average from 0-1 km to 1-5 km in China, with large heterogeneity in the extent of attenuation ranging from 73 percent to 116 percent across industries. Second, the spatial decay speed is positively linked with proxies for knowledge spillovers and labor market pooling but is negatively linked with proxies for input sharing and the share of the state sector. Last, the inverse square distance decay function presents the best goodness of fit among the tested functional forms.
Keywords
Agglomeration economies, Attenuations peed, China, State-owned enterprise(SOE)
Discipline
Asian Studies | Industrial Organization | Regional Economics
Research Areas
Applied Microeconomics
Publication
Journal of Urban Economics
Volume
130
First Page
1
Last Page
18
ISSN
0094-1190
Identifier
10.1016/j.jue.2022.103458
Publisher
Elsevier
Citation
JING, Li; LI, Liyao; and LIU, Shimeng.
Attenuation of agglomeration economies: Evidence from the universe of Chinese manufacturing firms. (2022). Journal of Urban Economics. 130, 1-18.
Available at: https://ink.library.smu.edu.sg/soe_research/2627
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jue.2022.103458