Industrial development in the inland region of China: A case study of the motorcycle industry

Although the inland region of China has generally been left behind in economic development compared with the coastal region, the motorcycle industry in Chongqing has recorded remarkable growth due to the meteoric rise of private enterprises over the last decade. Based on panel data of enterprises, we attempt to identify the factors behind the dynamic development of this industry. We conclude that the success of the motorcycle industry in Chongqing is attributable to a combination of positive features from the Wenzhou model in the 1990s, in which industrial development is based on clustering of private enterprises, and the Sunan model in the 1980s, in which industrial development is based on the effective use of human resources recruited from existing state-owned enterprises (SOEs). Learning by collective enterprises from SOEs in Chongqing coupled with the growth of the private enterprise sector fostered cluster-based industrial development. Journal of Comparative Economics 34 (4) (2006) 818–838.