| Abstract: | This paper provides empirical evidence that spatial linkages matter for the localisation of global value chain activities. Relying on processing trade data for Chinese provinces during the period 1997–2008, we investigate whether a Chinese province's proximity to international suppliers and international buyers within an industry chain affects its attractiveness as an export processing location. We find that the upstream and downstream spatial linkages both have a strong and independent explanatory power. We also explore what factors explain the influence of these spatial linkages. |
