Induced-agglomeration policy, firm productivity and survival: evidence from China-1-

Wang, Jian-xiu and Hou, Dan-dan and Zhong, Shun-chang and You, Yun-tian (2025): Induced-agglomeration policy, firm productivity and survival: evidence from China-1-.

Abstract

Research conducted worldwide has established that industrial agglomeration can improve firm productivity, regardless of policy and institutional factors. In this study, we utilize firm-level data from the Chinese Industrial Enterprises Database (CIED) for the period of 1998-2014 to analyze the relationship between induced-agglomeration policy and the productivity of firms operating within industrial parks while considering productivity and regional heterogeneities. To ensure the reliability of our results, we adopt various identification strategies that produce consistent outcomes. Additionally, we examine the impact of induced-agglomeration policy on firm survival in industrial parks by utilizing a Cloglog survival model. Our findings indicate that induced-agglomeration policy has a negative effect on the productivity of firms operating within industrial parks, with the negative effects diminishing as TFP increases and being stronger in less developed areas. We also find that induced-agglomeration policy can effectively enhance the lifespan of firms, particularly in less developed regions. We then point out policy optimization and other future research topics.

• Item Type: MPRA Paper
• Language: English
• Keywords: Keywords induced-agglomeration policy·productivity·survival·China
• Subjects: C - Mathematical and Quantitative Methods > C0 - General; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O25 - Industrial Policy; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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