How does agglomeration promote the product innovation of Chinese firms?

China Economic Review, 2015, vol. 35, issue C, 105-120

Abstract: This study empirically analyzes the effect of agglomeration economies on firm-level product innovation (new products), using Chinese firm-level data from 1998 to 2007. In terms of new product introduction and new product output, I find that Chinese firms benefit from urbanization economies (as measured by the number of workers in other industries in the same city and by the diversity of industries in the same city). Conversely, I find no positive effects of localization economies (as measured by the number of other workers working for neighboring firms in the same industry and in the same city). These results suggest that in China, urbanization economies play an important role in fostering product innovation by urban size and diversity.

Keywords: Agglomeration economies; Localization economies; Urbanization economies; Product innovation; New product (search for similar items in EconPapers)
JEL-codes: L60 O14 R11 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (24)

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Working Paper: How Does Agglomeration Promote the Product Innovation of Chinese Firms? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:35:y:2015:i:c:p:105-120

DOI: 10.1016/j.chieco.2015.06.003

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