Acta Geographica Sinica ›› 2021, Vol. 76 ›› Issue (2): 398-414.doi: 10.11821/dlxb202102011

• Industrial and Regional Development • Previous Articles     Next Articles

Local export variety, regional institutions and firm related diversification

ZHU Shengjun(), JIN Wenwan   

  1. School of Urban and Environmental Sciences, Peking University, Beijing 100871, China
  • Received:2019-10-06 Revised:2020-07-02 Online:2021-02-25 Published:2021-04-25
  • Supported by:
    National Natural Science Foundation of China(41971154);National Natural Science Foundation of China(41701115);Key Project of National Natural Science Foundation of China(41731278)


Firm related diversification is a common strategy for emerging economies to promote growth. As evidenced in the rapidly expanding economic literature, a host of internal factors such as residual resources, firm scale and capital structure are important for firm product diversification. However, there has been a dearth of economic researches on the external factors of firm product diversification. Based on such consideration, this article investigates the influence of local related variety on firm's export diversification strategy and explores the moderating effects of regional institutions by estimating tobit model based on the trade data of China's 31 provinces during 2012-2016. The results show that: (1) local related variety has a significant impact on firms' export diversification strategy. Specifically, firms located in regions dominated by related varieties are more likely to show related diversification patterns of export products. (2) Besides, the relationships between firm routines and local related variety are different in varied institutional contexts. For example, the regional atmosphere of trust is one of the most important informal institutions. This paper finds that the atmosphere of local trust will strengthen the relationship between firms' related diversification patterns and local related variety significantly. As for formal institutions, we find different moderating effects of regional marketization, globalization and decentralization. Marketization's moderating role is positive, while regional process of globalization and decentralization exerts a serious negative impact on the consistency of regions and firms in diversification patterns. According to the above results, this paper attempts to redress the neglect of regional institutions and forge a link between the economic and geographical investigations which helps to offer a broader view on the external factors of firm related diversification. It also points out that there is a complex relationship among local export variety, regional institutions and firm related diversification. Chinese government should promote local firm's contacts by preferential policies and create new opportunities for local industrial development.

Key words: export diversification, firm related diversification, local variety, regional institutions, China