Cluster and co-located cluster effects: An empirical study of six Chinese city regions

Abstract

We study how industrial clusters in three different life phases both influence and moderate total factor productivity (TFP) of other co-located industries or clusters. A multilevel regression model is applied to panel data, 1993–2012, from the Pearl River Delta, China. Our empirical results show that emerging clusters have negative effects on other co-located industries’ or clusters’ TFP while mature clusters have positive effects. Emerging clusters positively moderate TFP, while mature clusters negatively moderate TFP of other co-located industries or clusters; declining clusters only have direct positive impact on TFP of other co-located industries or clusters.