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Industry specialization, diversification, churning, and unemployment in Chinese cities

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Listed:
  • Fu, Shihe
  • Dong, Xiaofang
  • Chai, Guojun
Abstract
This paper studies how industry specialization, diversification, and churning affect unemployment rates in Chinese cities. Using a city level panel data set from 1997 to 2006, we find that the specialization of wholesale and retail industry can significantly decrease unemployment rate; however, specializing in finance industry increases unemployment rate. In contrast to the evidence from developed countries, industry diversity is positively and significantly associated with unemployment rates in Chinese cities, possibly due to the higher degree of industry churning during the sample period. We also find that urban economic growth, market maturity measured by the proportion of private sector employment, and human capital can decrease unemployment rate. Industry diversity does not stabilize unemployment; wholesale and retail industry increases unemployment fluctuations; but market maturity and human capital stabilize unemployment.

Suggested Citation

  • Fu, Shihe & Dong, Xiaofang & Chai, Guojun, 2008. "Industry specialization, diversification, churning, and unemployment in Chinese cities," MPRA Paper 15339, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15339
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    References listed on IDEAS

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    Cited by:

    1. Randall Jackson, 2015. "Are Industry Clusters and Diversity Strange Bedfellows?," The Review of Regional Studies, Southern Regional Science Association, vol. 45(2), pages 113-129, Fall.
    2. Marina Malkina, 2019. "How Change in Industry Mix Can Improve the Financial Performance of Regional Economies: Evidence from the Portfolio Approach," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(6), pages 1561-1575.
    3. Marina Yurievna Malkina, 2018. "Instability of Financial Return of Regional Economies and Its Determinants," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 88-114.
    4. Watson, Philip & Deller, Steven, 2017. "Economic diversity, unemployment and the Great Recession," The Quarterly Review of Economics and Finance, Elsevier, vol. 64(C), pages 1-11.
    5. repec:wyi:journl:002154 is not listed on IDEAS
    6. Ouyang, Puman & Fu, Shihe, 2012. "Economic growth, local industrial development and inter-regional spillovers from foreign direct investment: Evidence from China," China Economic Review, Elsevier, vol. 23(2), pages 445-460.
    7. Wang, Xiaoyu & Sun, Yanlin & Peng, Bin, 2023. "Industrial linkage and clustered regional business cycles in China," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 59-72.
    8. Liu, Yang, 2013. "Labor market matching and unemployment in urban China," China Economic Review, Elsevier, vol. 24(C), pages 108-128.
    9. Randall Jackson, 2015. "Fellows Address: Are Industry Clusters and Diversity Strange Bedfellows?," Working Papers Working Paper 2015-04, Regional Research Institute, West Virginia University.

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    More about this item

    Keywords

    Industry structure; specialization; industry diversity; unemployment; churning;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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