Finance and cluster-based industrial development in China

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dc.creatorRuan, Jianqing
dc.creatorZhang, Xiaobo
dc.date2008
dc.date2024-11-21T09:50:45Z
dc.date2024-11-21T09:50:45Z
dc.date.accessioned2026-06-27T15:07:44Z
dc.descriptionThe traditional literature emphasizes the causal role of finance in promoting industrial growth. China's rapid industrialization over the past several decades, which has occurred in the absence of well-functioning financial markets, seems to defy the conventional wisdom. By studying a cashmere sweater cluster in China, this paper argues that rural industrial clustering, as a new business model, lowers the entry barriers of initial capital investment through the division of labor. Within these clusters, enterprises can often acquire trade credits from upstream or downstream firms and obtain informal financing from friends and relatives, and use these funds to mitigate constraints of working capital. These findings help explain China's rapid industrialization in the absence of an efficient financial market.
dc.formatapplication/pdf
dc.identifierhttps://hdl.handle.net/10568/160423
dc.identifier.urihttp://hdl.handle.net/123456789/95387
dc.languageen
dc.publisherInternational Food Policy Research Institute
dc.rightsOpen Access
dc.sourceRuan, Jianqing; Zhang, Xiaobo. 2008. Finance and cluster-based industrial development in China. IFPRI Discussion Paper 768. https://hdl.handle.net/10568/160423
dc.subjectindustrialization
dc.subjectcluster sampling
dc.subjectfinance
dc.subjectgrowth
dc.subjectindustrial development
dc.titleFinance and cluster-based industrial development in China
dc.typeWorking Paper

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)