China's Auto LaneEconomic Geography vs Chinese Political Economy

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Résumé:

China's political economy (provinces versus Beijing) has resulted in assembly plants in most provinces. Economic geography suggests that plants located distant from customers are not viable in the long run (see work by James Rubenstein and Thomas Klier). Is the industry still dispersed if we look at suppliers? Quite simply, no: we find 70% of suppliers in the core region.