Locating Near Big Firms Helps Small Businesses Grow Bigger
The research looked at how companies in China from 1998 to 2005 grow bigger by being around other big companies in the same industry. They found that when companies are located near other big companies, they tend to grow larger themselves. This trend is similar to what happens in more advanced countries. By using smart statistics, the study confirmed that being in a cluster with large firms actually causes companies to become bigger. So, it's not just a coincidence. In fact, being close to a few big players brings more growth than being close to many small companies. This shows that in China, being part of a group of big firms can help companies expand and thrive.