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Geographical Agglomeration of Chinese Manufacturing Industries

Abstract Based on the plant level data from the First National Census of Basic Units, the Second National Census of Basic Units, and the First National Economic Census of China, this paper examines the geographical agglomeration of Chinese manufacturing industries at a more disaggregated level both by industrial classification and spatial unit analysis. Applying the agglomeration index proposed by Maurel and Sedillot, studies show that the most agglomerated industries are resource-intensive, and capital and technology intensive while industries demanding localized inputs or serving localized markets or favored by local governments are fairly dispersed. The more disaggregated industries are more spatially agglomerated. At the finer spatial scale, industries are more dispersed. Results indicate that within-county spillovers are stronger than nearby-county spillovers, and within-prefecture spillovers are stronger than nearby prefecture spillovers. Localized spillovers are still quite substantial at a range beyond that of counties. Comparing the agglomeration index of Chinese manufacturing industries in 1996, 2001 and 2004, agglomeration seems to be a general tendency. Results also indicate that some industries have experienced remarkable changes in their levels of agglomeration in the period 1996–2004.