state three reasons for the concentration of manufacturing industries in the urban areas of a country

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Local protectionism in China as a drag on productivity and factor mobility has been cited in a number of papers, including Cai, Wang, and Du (2002), Poncet (2006), Li (2008), Wei, Li, and Wang (2007), Zhang and Tan (2007), and Chien and Gordon (2008). Local (provincial to county) protectionism has been found to be a deterrent to agglomeration of industries in several analyses, including those by Bai, Du, Tao, and Tong (2004), He, Wei, and Pan (2007), and He, Wei, and Xie (2008). The dispersal of SOEs under regional protectionism occurs because of intra-national trade restrictions that limit industrial concentration and encourage inefficient duplication of production across jurisdictions. ...

... identified a trend of increasing geographic concentration for most manufacturing industries from 1980 to 1995, the first phase of economic transition.In contrast,Bai et al. (2004), employing a Hoover index, found a U-shaped pattern of evolution of the general degree of industry agglomeration, with the turning point around 1988. Each of these early studies was conducted at the provincial level, and therefore could only draw conclusions at a fairly broad geographical scale.Later,He, Wei, and Pan (2007) examined the relationship of globalization and local protectionism in shaping industry agglomeration at a much finer county-scale of analysis. That scale was also used byHe, Wei, and Xie (2008) in their examination of the factors underlying geographical concentrations of industry. ...

... Producers with significant export sales are more likely to be found in coastal regions of China, but those locations are also where the greatest levels of domestic demand are found(Fujita, Mori, Henderson, and Kanemoto 2004). Foreign capital (FC) is also attracted to coastal regions, and can account for the concentration of manufacturing there, as well(He, Wei, and Pan 2007;He, Wei, and Xie 2008). Provincial level of coal production is a rough measure of natural resource endowment, a factor that can also contribute to the spatial concentration of manufacturing. ...

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