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Geographical agglomeration and co-agglomeration of foreign and domestic enterprises: a case study of Chinese manufacturing industries

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  • Canfei He
  • Junsong Wang

Abstract

Industrial agglomeration has been pervasive owing to natural advantages, spillover effects and institutional advantages. The co-agglomeration of foreign and domestic enterprises may be a driving force of intra-industrial agglomeration. Theories however provide conflicting predictions on whether foreign and domestic enterprises share similar locations. Based on data from the Annual Survey of Industrial Firms in 2005 in China, this study finds that foreign enterprises are considerably more agglomerated than domestic enterprises, and there exist significant industrial variations in the intra-industry co-agglomeration of foreign and domestic enterprises. Statistical analysis suggests that foreign-specific agglomeration and dependence on intermediate inputs from primary industries discourage the co-agglomeration of foreign and domestic enterprises. Differences in equipment, technology and labour productivity result in locational patterns of foreign enterprises distinct from those of domestic enterprises. Meanwhile statistical results confirm the positive role of external economies and knowledge spillover effects in driving the co-agglomeration of foreign and domestic enterprises.

Suggested Citation

  • Canfei He & Junsong Wang, 2010. "Geographical agglomeration and co-agglomeration of foreign and domestic enterprises: a case study of Chinese manufacturing industries," Post-Communist Economies, Taylor & Francis Journals, vol. 22(3), pages 323-343.
    • Handle: RePEc:taf:pocoec:v:22:y:2010:i:3:p:323-343
    DOI: 10.1080/14631377.2010.498682
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    References listed on IDEAS

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    1. Daniel H. Rosen, 1999. "Behind the Open Door: Foreign Enterprises in the Chinese Marketplace," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 23, April.
    2. Gilles Duranton & Henry G. Overman, 2008. "Exploring The Detailed Location Patterns Of U.K. Manufacturing Industries Using Microgeographic Data," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 213-243, February.
    3. Hogenbirk, Annelies & Narula, Rajneesh, 2004. "Location and agglomeration of FDI in The Netherlands: implications for policy," Research Memorandum 006, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    4. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2002. "Coagglomeration and growth," LIDAM Discussion Papers CORE 2002053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:

    1. Junsong Wang & Martha Prevezer, 2015. "Related variety in Chinese cities: local and Foreign Direct Investment related variety and impacts on urban growth," Working Papers 59, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    2. Lu, Xinhai & Chen, Danling & Kuang, Bing & Zhang, Chaozheng & Cheng, Chen, 2020. "Is high-tech zone a policy trap or a growth drive? Insights from the perspective of urban land use efficiency," Land Use Policy, Elsevier, vol. 95(C).
    3. Lingfan Yang & Xiaolong Luo & Ziyao Ding & Xiaoman Liu & Zongni Gu, 2022. "Restructuring for Growth in Development Zones, China: A Systematic Literature and Policy Review (1984–2022)," Land, MDPI, vol. 11(7), pages 1-32, June.

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