Wage- based evidence of returns to external scale in China's manufacturing: A spatial analysis

Wage-based evidence of returns to external scale in China’s manufacturing in 2004 is assessed using county-level units of observation. Two models are used: one with population and percent manufacturing employment as measures of urbanization and localization, respectively, and the other with populati...

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Bibliographic Details
Published in:The Annals of regional science 2012-08, Vol.49 (1), p.1-16
Main Authors: Hanink, Dean M, Cromley, Robert G, Ebenstein, Avraham Y
Format: Article
Language:English
Subjects:
Agglomeration
Bgi / Prodig
Bildungsertrag
China
Economic development
Economics
Economics and Finance
Economies of scale
Education
Employment
Environmental Economics
Estimation
Geography
Human geography
Labor productivity
Landscape/Regional and Urban Planning
Localization
Manufacturing
Microeconomics
Original Paper
Political and economic geography
Population density
Product differentiation
Regional economy and planning
Regional/Spatial Science
Regression analysis
Schools
Spatial analysis
Studies
Urbanization
Verarbeitendes Gewerbe
Wages
Wages & salaries
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Summary:Wage-based evidence of returns to external scale in China’s manufacturing in 2004 is assessed using county-level units of observation. Two models are used: one with population and percent manufacturing employment as measures of urbanization and localization, respectively, and the other with population density and total manufacturing employment. Global results estimated from spatial error models and local results from geographically weighted regressions indicate that urbanization economies of scale, measured in terms of population but not population density, and localization economies of scale, measured in terms of percent of employment in manufacturing or total manufacturing employment, are apparent—but only when internal scale of production is not included as an explanatory factor in the models. Economies of scale are still outcomes of the models, but only when the urbanization, localization, and internal scale factors are considered in combination. The results not only illustrate particular characteristics with respect to recent returns in China’s manufacturing, they are also interesting with respect to schools of thought concerning increasing returns as externality effects.
ISSN:1432-0592
0570-1864
1432-0592
DOI:10.1007/s00168-010-0431-3