Agglomeration boosts productivity, empowering local manufacturing hubs.
The study looked at how industrial clusters affect productivity in Chinese manufacturing. They used a special statistical method to analyze data and found that being close to other similar businesses can boost productivity. However, being in a city with more people doesn't have the same effect. The benefits of being near similar businesses are greater when employees are more educated and when businesses share resources. This suggests that working near similar businesses can help companies learn from each other and share materials, leading to better productivity.