The nature of economic development zones in China:an empirical study based on data from the Yangtze River Delta

Development zones, born in the course of China’s economic transition, are the carriers of both the favorable institutions and the foreign advanced technology. They are now at the stage of transferring from the concentration of firms to being industrial clusters. Based on data of firms in development zones along the Yangtze River obtained through micro-level investigation, this paper studies the effects of local factors special to development zones as well as the influence of technology promotion on the economic performance of those firms “locating” in development zones, and thus discloses the nature of firms concentrating into development zones and their trend of transferring into industrial clusters. The empirical study suggests that firms locating on development zones mainly aim at obtaining “policy rents”, which results in that firms concentrating in development zones do not possess the industrial cluster effect in the general sense: the benefits of closing to the supply or demand market. However, although firms in a develop zone do not necessarily concentrate with related firms in space, their technology and market activities are inevitably to produce relations with factors such as local governments and related industrial elements and thus affect the economic performance of firms and nurture the clustering effects of development zones. Therefore, as “policy rents” fade away due to industry transfer and adjustment of favorable economic policies, the key to keep development zones sustainable is to enhance their clustering effects.development zones along the Yangtze River, spatial concentration of firms, industrial clustering effect, technology promotion, policy rents

Human Capital, Education, and Entrepreneurs: Evidence from the Yangtze River Delta

This paper seeks to examine the relationship between education demand and entrepreneurs in the process of enhancing the growth of human capital in China. We develop a theoretical model that incorporates the important roles played by human capital, education and entrepreneurs. Then, we derive an immigration condition under which the demand for education depends on the existence of entrepreneurs. Finally, we test whether this condition holds true in China, using a panel data set from the Yangtze River Delta which is considered a key barometer of Chinese economy. The empirical results reveal a significant positive relationship between entrepreneurs and education demand in the Yangtze River Delta, suggesting that if we can find ways to promote the growth of entrepreneurial endeavors, we could spur the growth of education demand and further drive human capital accumulation in China

Entrepreneurship, Innovation and Economic Growth:The Case of Yangtze River Delta in China

This paper firstly discusses why the economic growth in the Yangtze River Delta has been slowed down recently and suggests a need totransform the current input-based economic growth pattern into aninnovation-based one. Next, through our theoretical analysis, we find that the change of current economic growth pattern is just the innovative reallocationof production factors, and the new economic growth driven by innovation is mainly initiated by the transmutation of entrepreneurship. Finally, we test our belief with real-world evidence. It shows that the Delta has formed a mechanism in which entrepreneurship and human capital mutually promote each other. However, the interactive relationship between R&D expenditure and entrepreneurship has not been developed in general. In addition, excessive government interventions will do harm to the growth of entrepreneurs and economic development.entrepreneurship, innovation and economic growth pattern

Industrial Upgrade, Adverse Employment Shock and Land Centralization

Traditional Development Economics defines economic development in the view of transferring rural surplus labor force. It implies the industrialization is in a static state at a certain level while it is in a process of continuous industrial upgrade in reality. Under the circumstances, we analyze phenomenon followed by the upgrading of industrial structure such as return migration and mid-aged rural labors’ difficulty in job-hunting and demonstrated the influence of land centralization based on the practice of industrial upgrade and rural change in Suzhou. Finally it come to the conclusion that because of the extensive competition on simple-labor market, the industrial upgrade will make a adverse employment shock upon mid-aged rural labor which will lead to the more uncertainty of peasants to get jobs in the industrial section . If government takes an improper policy of land centralization, peasants will lose guarantee in the future and resist the land centralization. After the comparison between one-off compensation and land cooperation, a further demonstration show that the method of one-off compensation will depress peasants’ enthusiasm in land centralization while the form of land cooperation can guarantee and promote peasants’ welfare under the given institution of land ownership. As a result, land cooperation allows the smooth operation of land centralization and supports the industrial upgrade to some extent.Over-confidence，Regional Government Competition，Redundant Construction，Yangzte River Delta

Industrial Upgrade, Employment Shock and Land Centralization in China

This paper investigates the relationships among industrial upgrading, mid-aged peasants’ non-farm employment, and land conversion systems. We prove that China’s efforts to upgrade its industries generate a negative employment shock on mid-aged peasant workers, forcing some of them to return to their home villages. The current lump-sum land acquisition system, however, will neither help peasant workers deal with the adverse employment shock nor promote land centralization for industrial and urban uses. On contrary, land cooperation, an emerging land centralization system, will help peasant workers mitigate the adverse employment shock and centralize rural land for nonagricultural purposes.Peasant workers; Industrial upgrade; Employment; Land centralization

Impact of industrial linkages on firm performance in development zones

This article investigates the effect of industrial linkages on firm performance in Chinese development zones, using Jiangsu Province as a case study. An ordered response model based on the dependent variable being ordinal was developed. The empirical results reveal an insignificant relationship between industrial linkages and firm performance. Our interpretation of this finding mainly lies with the global and domestic challenges that have changed the way participating firms operate and organize in the development zones of Jiangsu. When many other economic factors take precedence over industrial linkages in driving superior firm performance, firms feel it less important to get closer to their suppliers or customers, therefore weakening the impact of industrial linkages. Although this article primarily focuses on development zones in Jiangsu Province, the findings and discussion will provide insights for other development zones in China that may be, reviewing their development strategies because most of them have similar development problems.Industrial linkages; Development zones

Technology capacity, product position and firm’s competitiveness: an empirical analysis

Using firm-level data from a 2009 survey conducted in Suzhou City, Jiangsu Province, China, this paper examines impacts of technology capacity and value-chain position on firm’s product competitiveness. Both technology capacity and product competitiveness are self-assessed relative to other firms and products in the same industry. The position of value-chain is measured relative to if a firm is an original brand manufacturer or not. Our empirical results show that competitiveness rises with firm’s technology capacity and its position in the global value chain. This finding is consistent with the theoretical prediction. The paper also investigates determinants of technology capacity and value-chain position, including firm’s size, R&D spending, location dummies, education level of technical and management personnel, wages of technical and management personnel, and enterprise ownership. Bootstrapping, Probit, and linear probability regression models are employed.Technology Capacity; Original Brand Manufacturer; Competitiveness; Global Value Chain; Bootstrapping

Industrial Specific Resource Allocation, Incentive Differentiation and Industrial Development Order: the Function Evolvement of Jiangsu Laver Association in Anti-Trade Barrier Litigation

For sake of actualizing anti-trade barrier and changing the situation of price war after China’s taking part in WTO, Jiangsu laver association was founded. By using the Bayesian Cournot model, this paper analyzes the basis of trade association’s foundation is the ability of improving product quality and technique which is distributed heterogeneously in the firm of the industry. The paper defines this kind of ability as industrial specific resources which are formed during the process of industrial competition and development. Actually they are potential rents and laver firms can acquire them selectively by laver association’s enforcement of transaction rules in laver exchange office. It changes the industrial competition from reducing quality and price to upgrading quality and price and forms the basis of association’s existence. Whether the function is strong or not depends on association’s understanding of industrial specific resources and incentive benefits which is given to the member firms. It is not that association comes into being by the appearance of industrial specific resources and dies because of disappearance of industrial specific resources, but that association uses industrial specific resource into firms and it can reach a kind of separated equilibrium during the competition of improving quality and raising price. Association improves the quality of transaction governance continually and keeps the separated equilibrium maintained steadily. It makes the whole industry in good development order

The nature of economic development zones in China:an empirical study based on data from the Yangtze River Delta

Development zones, born in the course of China’s economic transition, are the carriers of both the favorable institutions and the foreign advanced technology. They are now at the stage of transferring from the concentration of firms to being industrial clusters. Based on data of firms in development zones along the Yangtze River obtained through micro-level investigation, this paper studies the effects of local factors special to development zones as well as the influence of technology promotion on the economic performance of those firms “locating” in development zones, and thus discloses the nature of firms concentrating into development zones and their trend of transferring into industrial clusters. The empirical study suggests that firms locating on development zones mainly aim at obtaining “policy rents”, which results in that firms concentrating in development zones do not possess the industrial cluster effect in the general sense: the benefits of closing to the supply or demand market. However, although firms in a develop zone do not necessarily concentrate with related firms in space, their technology and market activities are inevitably to produce relations with factors such as local governments and related industrial elements and thus affect the economic performance of firms and nurture the clustering effects of development zones. Therefore, as “policy rents” fade away due to industry transfer and adjustment of favorable economic policies, the key to keep development zones sustainable is to enhance their clustering effects

Industrial Specific Resource Allocation, Incentive Differentiation and Industrial Development Order: the Function Evolvement of Jiangsu Laver Association in Anti-Trade Barrier Litigation

For sake of actualizing anti-trade barrier and changing the situation of price war after China’s taking part in WTO, Jiangsu laver association was founded. By using the Bayesian Cournot model, this paper analyzes the basis of trade association’s foundation is the ability of improving product quality and technique which is distributed heterogeneously in the firm of the industry. The paper defines this kind of ability as industrial specific resources which are formed during the process of industrial competition and development. Actually they are potential rents and laver firms can acquire them selectively by laver association’s enforcement of transaction rules in laver exchange office. It changes the industrial competition from reducing quality and price to upgrading quality and price and forms the basis of association’s existence. Whether the function is strong or not depends on association’s understanding of industrial specific resources and incentive benefits which is given to the member firms. It is not that association comes into being by the appearance of industrial specific resources and dies because of disappearance of industrial specific resources, but that association uses industrial specific resource into firms and it can reach a kind of separated equilibrium during the competition of improving quality and raising price. Association improves the quality of transaction governance continually and keeps the separated equilibrium maintained steadily. It makes the whole industry in good development order.trade association; industrial specific resources; selective incentive