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The evolution of an industrial cluster in China:

Author

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  • Fleisher, Belton
  • Hu, Dinghuan
  • McGuire, William
  • Zhang, Xiaobo

Abstract

"We use two rounds of surveys, taken in 2000 and 2008 in the Zhili Township children's garment cluster in Zhejiang Province, to examine in depth the evolution of this industrial cluster. Firm size has grown on average in terms of output and employment, and increasing divergence in firm sizes has been associated with a significant rise in specialization and outsourcing among firms in the cluster. Although the investment amount needed to start a business has more than tripled, this amount remains low enough that formal bank loans remain an insignificant source of finance. Because of low entry barriers, the number of firms in the cluster has risen, driving down profits and bidding up wages, particularly since the year 2000. Facing severe competition, more firms have begun to upgrade their product quality. By the year 2007, nearly half of the sampled firms had established registered trademarks and nearly 20 percent had become International Office of Standardization (ISO) certified." from authors' abstract

Suggested Citation

  • Fleisher, Belton & Hu, Dinghuan & McGuire, William & Zhang, Xiaobo, 2009. "The evolution of an industrial cluster in China:," IFPRI discussion papers 896, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:896
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    References listed on IDEAS

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    Cited by:

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    2. Dai, Ruochen & Mookherjee, Dilip & Quan, Yingyue & Zhang, Xiaobo, 2021. "Industrial clusters, networks and resilience to the Covid-19 shock in China," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 433-455.
    3. Xiaohong He & Renyong Chi, 2013. "Underlying Logics That Transform Survival Or Subsistent Entrepreneurship Clusters In Developing Countries," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 18(03), pages 1-30.
    4. Xu, Cheng-Gang & Guo, Di & Jiang, Kun & Yang, Xiyi, 2020. "Geographic Clustering and Resource Reallocation Across Firms in Chinese Industries," CEPR Discussion Papers 14506, C.E.P.R. Discussion Papers.
    5. Jiafeng Gu, 2021. "Spatiotemporal context and firm performance: The mediating effect of strategic interaction," Growth and Change, Wiley Blackwell, vol. 52(1), pages 371-391, March.
    6. Sonobe, Tetsushi & Higuchi, Yuki & Otsuka, Keijiro, 2012. "Productivity growth and job creation in the development process of industrial clusters," Policy Research Working Paper Series 6280, The World Bank.
    7. Sulser, T. B., 2009. "Green and blue water accounting in the Limpopo and Nile basins: implications for food and agricultural policy," IWMI Working Papers H042476, International Water Management Institute.
    8. Enrique Claver-Cortés & Bartolomé Marco-Lajara & Pedro Seva-Larrosa & Lorena Ruiz-Fernández & Eduardo Sánchez-García, 2020. "Explanatory Factors of Entrepreneurship in Food and Beverage Clusters in Spain," Sustainability, MDPI, vol. 12(14), pages 1-22, July.
    9. Shahid Yusuf, 2012. "From Technological Catch-up to Innovation : The Future of China’s GDP Growth," World Bank Publications - Reports 12781, The World Bank Group.
    10. Yu Chen & Zhigang Li & Zheng Liu, 2018. "Agglomeration and actual tax rates: firm-level evidence from China," Regional Studies, Taylor & Francis Journals, vol. 52(1), pages 93-104, January.
    11. Qi, Jiaqi & Zheng, Xiaoyong & Guo, Hongdong, 2019. "The formation of Taobao villages in China," China Economic Review, Elsevier, vol. 53(C), pages 106-127.
    12. Junqian Wu & Xiaoqian Liu & Jianqing Ruan & Xiulin Qi & Chang’an Wang & Dan Fan, 2021. "Space Power in Inclusive Development: Industrial Clusters and Rural Anti-Poverty," IJERPH, MDPI, vol. 18(20), pages 1-13, October.
    13. Dai, R. & Mookherjee, D. & Munshi, K. & Zhang, X., 2018. "Community Networks and the Growth of Private Enterprise in China," Cambridge Working Papers in Economics 1850, Faculty of Economics, University of Cambridge.
    14. Hu, Cui & Xu, Zhaoyuan & Yashiro, Naomitsu, 2015. "Agglomeration and productivity in China: Firm level evidence," China Economic Review, Elsevier, vol. 33(C), pages 50-66.
    15. Xu, Cheng-Gang & Guo, Di & Jiang, Kun & Yang, Xiyi, 2017. "Clustering, Growth, and Inequality in China," CEPR Discussion Papers 12543, C.E.P.R. Discussion Papers.
    16. Bellandi, Marco & Lombardi, Silvia, 2012. "Specialized markets and Chinese industrial clusters: The experience of Zhejiang Province," China Economic Review, Elsevier, vol. 23(3), pages 626-638.
    17. Xiwei Zhu & Ye Liu & Ming He & Deming Luo & Yiyun Wu, 2019. "Entrepreneurship and industrial clusters: evidence from China industrial census," Small Business Economics, Springer, vol. 52(3), pages 595-616, March.
    18. Ruochen Dai & Dilip Mookherjee & Kaivan Munshi & Xiaobo Zhang, 2019. "The Community Origins of Private Enterprise in China," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-320, Boston University - Department of Economics.
    19. John Rand & Finn Tarp & Neda Trifković & Helge Zille, 2019. "Industrial agglomeration in Myanmar," WIDER Working Paper Series wp-2019-3, World Institute for Development Economic Research (UNU-WIDER).
    20. Long, Cheryl & Zhang, Xiaobo, 2012. "Patterns of China's industrialization: Concentration, specialization, and clustering," China Economic Review, Elsevier, vol. 23(3), pages 593-612.
    21. Tong Tong & Norzalina Binti Zainudin & Jingwen Yan & Azmawani Abd Rahman, 2023. "The Impact of Industry Clusters on the Performance of High Technology Small and Middle Size Enterprises," Sustainability, MDPI, vol. 15(12), pages 1-16, June.
    22. Lin, Hui-Lin & Li, Hsiao-Yun & Yang, Chih-Hai, 2011. "Agglomeration and productivity: Firm-level evidence from China's textile industry," China Economic Review, Elsevier, vol. 22(3), pages 313-329, September.

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    More about this item

    Keywords

    Cluster; Industrialization; Growth; Development strategies;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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