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This paper examined the impact of vertical specialization on the agglomeration of China’s manufacturing sector from a regional perspective. It also explored the features of the agglomeration process of manufacturing sector in different regions of China. The paper first calculated the degree of vertical specialization and agglomeration respectively by using statistics of 2-digit manufacturing sub-industries at province level from year 2003 to 2008. And then it further built a panel data model to estimate the impact of vertical specialization on the agglomeration of manufacturing sector at both national and regional level. The results of the research reveal the existence of strong regional disparity as to the impact of vertical specialization on agglomeration of China’s manufacturing sector. Vertical specialization is found to be significantly positive related to the formation and development of manufacturing agglomeration at national level. However, this positive effect on national level, as suggested by a more thorough estimation, owes mainly to the positive relation of the two subjects in eastern China. Different from the case in eastern and western China, where vertical specialization stimulates manufacturing sector to be agglomerated, the impact of vertical specialization on agglomeration is negative in the middle part of China.
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- The Impact of Vertical Specialization on the Agglomeration of China’s Manufacturing Sector: An Empirical Research Based on Province Level Panel Data
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