Clustering, Growth, and Inequality in China

47 Pages Posted: 10 Apr 2018 Last revised: 20 Nov 2019

See all articles by Di Guo

Di Guo

Brunel University London

Kun Jiang

University of Roehampton

Chenggang Xu

University of Hong Kong

Xiyi Yang

ShanghaiTech University - School of Entrepreneurship and Management

Multiple version iconThere are 2 versions of this paper

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

Guo, Di and Jiang, Kun and Xu, Chenggang and Yang, Xiyi, Clustering, Growth, and Inequality in China (September 1, 2017). ShanghaiTech SEM Working Paper No. 2018-007, Available at SSRN: https://ssrn.com/abstract=3159741 or http://dx.doi.org/10.2139/ssrn.3159741

Di Guo

Brunel University London ( email )

Kingston Lane
Uxbridge
United Kingdom, London Ub8 3PH
United Kingdom

HOME PAGE: http://https://www.brunel.ac.uk/people/di-guo

Kun Jiang

University of Roehampton ( email )

Roehampton Lane
London, SW15 5PU
United Kingdom

Chenggang Xu

University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

Xiyi Yang (Contact Author)

ShanghaiTech University - School of Entrepreneurship and Management ( email )

100 Haike Rd
Pudong Xinqu, Shanghai
China

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