TITLE:
Do Clusters Influence Productivity in China’s Software Industry?
AUTHORS:
Mark J. Purdy, Xiao Chang
KEYWORDS:
Firm Clusters; Educational Clusters; Productivity; Research and Development; Software Industry
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.1,
February
12,
2014
ABSTRACT: Based on data from
2007 to 2011 across 29 provinces in China, this paper employs a panel-based
econometric model to investigate the impact of clusters (of firms and
educational institutions) and R & D investment in driving productivity in
China’s software industry. In respect of clusters, our results show that a one
percent increase in the density of firm clusters leads to a 0.10 percent
increase in productivity; for clusters of educational institutions, a
significantly positive impact on productivity in coastal regions has been
identified. In terms of R & D investment, a one percent increase in R &
D expenditure per R & D worker leads to a 0.22 percent increase in
productivity, although the effect is significantly reduced in coastal region.
For policymakers, the results of this study shed light on the effectiveness of
different levers in narrowing regional productivity gaps. It can also help
business leaders make better decisions regarding their innovation activities.