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Who leads regional industrial dynamics? “New industry creators” in Chinese regions

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  • Shengjun Zhu
  • Zhenfa Li
  • Canfei He

Abstract

Recent evolutionary economic geography studies have argued that regional diversification emerges as a path‐dependent process, as regions often branch into industries that are related to its industrial structure. However, it is less clear who are creating new industries and under what regional conditions. This research seeks to fill this gap and identify “new industry creators” in regional industrial diversification. We differentiate two types of new industry formation—path‐breaking and path‐dependent—and examine whether some new industry creators are more path‐breaking than others, by incorporating two factors that have been largely overlooked in recent literature on technological relatedness—firm heterogeneity and regional institutions. Based on a firm‐level data set of China’s manufacturing industries, this paper shows that path‐breaking and path‐dependence coexist. Empirical results confirm that firm heterogeneity and regional institutions not only affect the firms’ capabilities in creating new industries, but also encourage/discourage firms to be adventurous and path‐breaking. This research implies that lagging regions can catch up with developed regions by coordinating regional resources and adjusting local institutional arrangements to attract more path‐breaking firms.

Suggested Citation

  • Shengjun Zhu & Zhenfa Li & Canfei He, 2019. "Who leads regional industrial dynamics? “New industry creators” in Chinese regions," Growth and Change, Wiley Blackwell, vol. 50(1), pages 69-89, March.
    • Handle: RePEc:bla:growch:v:50:y:2019:i:1:p:69-89
    DOI: 10.1111/grow.12279
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    Cited by:

    1. Cassandra C. Wang & Gary Gereffi & Zhigao Liu, 2021. "Beyond technological relatedness: An evolutionary pro‐growth coalition and industrial transformation in Kunshan, China," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2318-2341, December.
    2. Eduardo Polloni‐Silva & Herick Fernando Moralles & Daisy Aparecida do Nascimento Rebelatto & Dominik Hartmann, 2021. "Are foreign companies a blessing or a curse for local development in Brazil? It depends on the home country and host region's institutions," Growth and Change, Wiley Blackwell, vol. 52(2), pages 933-962, June.
    3. Wenying Fu, 2020. "Spatial mobility and opportunity-driven entrepreneurship: the evidence from China labor-force dynamics survey," The Journal of Technology Transfer, Springer, vol. 45(5), pages 1324-1342, October.
    4. Ziliang Liu & Shengjun Zhu, 2021. "Changing institutional context and regional industrial dynamics: New evidence from the establishment of administrative approval centers in China," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1271-1294, September.
    5. Zehong Wang & Shaojian Wang & Jieyu Wang & Yuqu Wang, 2022. "Development zones and urban economic performance in China: Direct impact and channel effects," Growth and Change, Wiley Blackwell, vol. 53(4), pages 1762-1782, December.
    6. Yinyin Wen & Min Zhao & Genli Tang & Xiaoxiao Zhou & Xingchen Hu & Li Sui, 2023. "How does financial agglomeration affect green development? Evidence from the Yangtze River Delta of China," Growth and Change, Wiley Blackwell, vol. 54(1), pages 135-156, March.

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