Resolving the Binding Constraints
2. Chinese statistics treat the cities of Beijing, Chongqing (since 1997), Shanghai, and Tianjin as province-level units. 3. Local governments do play a key role in facilitating quality upgrades. However, the timing matters. In the incipient stage of cluster development, local government policies are mostly oriented to quantity expansion. Interventions aimed at upgrading quality often become more relevant only after a quality crisis. See Ruan and Zhang (2010) on this point.
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