Industrial clusters in the long run: evidence from Million-Rouble plants in China

Stephan Heblich, Marlon Seror, Hao Xu, Yanos Zylberberg

Research output: Working paperWorking paper and Preprints

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Abstract

We identify the negative spillovers exerted by large, successful factories on other local production units in China. A short-lived cooperation program between the U.S.S.R. and China led to the construction of 156 \Million-Rouble plants" in the 1950s. The identication exploits the ephemeral geopolitical context and exogenous variation in location decisions due to the relative position of allied and enemy airbases. We nd a rise-and-fall pattern in counties hosting a factory and show that (over-) specialization explains their long-run decline. The analysis of production linkages shows that a very large cluster of non-innovative establishments enjoy technological rents along the production chain of Million-Rouble plants. This industrial concentration reduces the local supply of entrepreneurs.
Original languageEnglish
Publication statusPublished - 24 Jan 2020

Publication series

NameUniversity of Bristol Working Paper Series
PublisherUniversity of Bristol

Keywords

  • industrial clusters
  • Agglomeration economies
  • specialization

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