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Creative industries agglomeration and industrial efficiency in China

In this paper, we seek to explore the agglomeration externalities of creative industries impacting on industrial efficiency, both at the regional level and at the sector level. Firstly, we apply a data envelopment analysis model to compute the efficiency scores of creative industries in China. The result shows that China's industrial efficiency whether in different provinces or different creative sectors is characterized by huge disparities. Secondly, using the data from China's 31 provinces and 50 creative sectors during the period of 2004–2014, we empirically explore whether and how the development of creative industries agglomeration impact on industrial efficiency, where the agglomeration is distinguished between regional specialization, geographical concentration, and industrial concentration. We find that the three types of agglomeration externalities all play important roles in increasing productive efficiency in creative industries. The study also confirms that industrial efficiency is more likely to be increased by attracting much smaller firms concentrating in a given area, while this effect is mixed in a given creative sector.