City-industry Growth in China

This paper investigates the relevance of the two leading theories of city-industry growth (i.e., specialization and diversity theories) in accounting for the fast yet uneven growth of industries in Chinas cities. Using the data set of 29 two-digit manufacturing industries in 231 Chinas cities for the period 1998-2005, we \u85nd that specialization promotes city-industry growth, whereas diversity has no e¤ect at all. In addition, we \u85nd that specialization is important for the growth of mature industries in China, but diversity is crucial for the develop-ment of Chinas relatively new and fast-growing industries. Our study contributes to the literature by examining the relevance of the special-ization and diversity theories for a large and fast-growing developing economy