Clustering, Growth, and Inequality in China
47 Pages Posted: 10 Apr 2018 Last revised: 20 Nov 2019
There are 2 versions of this paper
Clustering, Growth, and Inequality in China
Clustering, Growth, and Inequality in China
Date Written: September 1, 2017
Abstract
This study examines the effects of China’s industrial clusters on its economic growth and urban–rural income inequality. A density-based index (DBI) is developed to capture the unique features of such clusters in China. From a county-level DBI panel data constructed based on firm-level and county-level datasets, we find that strong clusters and entrepreneurial clusters substantially enhance economic growth. Moreover, entrepreneurial clusters reduce urban–rural income inequality by increasing the income of rural residents. Identification issues are carefully addressed by deploying an instrumental variable approach.
Keywords: China, clustering, geography, growth and inequality, institutions
JEL Classification: O14, O15, R11
Suggested Citation: Suggested Citation
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