Super Factory Comes to Town: Identifying the Agglomeration Spillovers from Foxconn Factory in Henan
Prof. Hong MA
Professor of Economics, School of Economics and Management,
Date: 2 February 2024 (Friday)
Time: 10:30 am to 12:00 pm
Host: Prof. Leona Shao Zhi LI, Assistant Professor in Business Economics
This paper investigates the spillover effects of super factories on local manufacturing sector through agglomeration in developing economies. We use evidence from the largest provider of electronic manufacturing service in the world: Foxconn. Using its unexpected investment in Henan province of China as a quasi-natural experiment, we adopt a geographic difference-in-difference approach that exploits the spatial decay of the agglomeration effects from Foxconn factories. We find that the increase in the labor productivity of the regions closer to Foxconn factories is larger than those of regions further away. This finding is robust to a battery of validity checks. Consistent with the agglomeration spillovers, firm entry and labor costs increase more in regions closer to Foxconn factories than further away.
Prof. Hong MA is a professor of Economics at the School of Economics and Management, Tsinghua University. Prof. MA’s research mainly focuses on international trade and the Chinese economy. His work has been published in leading journals, including the Economic Journal, Review of Economics and Statistics, Journal of International Economics, and many others. He has also been awarded the Changjiang Young Scholar and the Anzijie Research Excellence in International Trade. Currently, he serves as an associate editor for the Journal of Comparative Economics, China Economic Review, and the Review of International Economics.
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