Industrial Clusters, Networks and Resilience to the COVID-19 Shock in China

47 Pages Posted: 3 Nov 2020

See all articles by Ruochen Dai

Ruochen Dai

Central University of Finance and Economics

Dilip Mookherjee

Boston University - Department of Economics

Yingyue Quan

Peking University

Xiaobo Zhang

Peking University - National School of Development

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Date Written: October 1, 2020

Abstract

We examine how exposure of Chinese firms to the Covid-19 shock varied with a cluster index (measuring spatial agglomeration of firms in related industries) at the county level. Two data sources are used: entry flows of newly registered firms in the entire country, and an entrepreneur survey regarding operation of existing firms. Both show greater resilience in counties with a higher cluster index, after controlling for industry dummies and local infection rates, besides county and time dummies in the entry data. Reliance of clusters on informal entrepreneur hometown networks and closer proximity to suppliers and customers help explain these findings.

Keywords: China, Clusters, COVID-19, firms, Social Networks

JEL Classification: D31, I3, J12, J16

Suggested Citation

Dai, Ruochen and Mookherjee, Dilip and Quan, Yingyue and Zhang, Xiaobo, Industrial Clusters, Networks and Resilience to the COVID-19 Shock in China (October 1, 2020). CEPR Discussion Paper No. DP15396, Available at SSRN: https://ssrn.com/abstract=3723588

Ruochen Dai (Contact Author)

Central University of Finance and Economics

770 Middle Road
Dresden, ME 04342
United States

Dilip Mookherjee

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States
617-353-4392 (Phone)
617-353-4143 (Fax)

Yingyue Quan

Peking University

No. 38 Xueyuan Road
Haidian District
Beijing, 100871
China

Xiaobo Zhang

Peking University - National School of Development ( email )

Beijing, 100871
China

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