A Proximity-Based Measure of Industrial Clustering

28 Pages Posted: 10 Nov 2015

See all articles by Jianqing Ruan

Jianqing Ruan

China Academy for Rural Development, Zhejiang University

Xiaobo Zhang

International Food Policy Research Institute (IFPRI)

Date Written: October 8, 2015

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: China; East Asia; Asia; economic development; industrial sector; industrial development; markets; regulations; economic policies; industrial clusters; proximity; concentration

JEL Classification: L10; L50; L60

Suggested Citation

Ruan, Jianqing and Zhang, Xiaobo, A Proximity-Based Measure of Industrial Clustering (October 8, 2015). IFPRI Discussion Paper 1468, Available at SSRN: https://ssrn.com/abstract=2688022

Jianqing Ruan (Contact Author)

China Academy for Rural Development, Zhejiang University ( email )

Yuhangtang Road 866
Hangzhou, Zhejiang 310058
China

Xiaobo Zhang

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States
202-862-5677 (Phone)
202-467-4439 (Fax)

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