Abstract
AbstractRegions tend to develop new products that are related to pre‐existing industrial structure. This stresses the critical role of relatedness in regional industrial diversification. Governments can also strongly affect the evolution of regional industrial structure by using a variety of industrial policies. Based on China's custom product level data, this study explores the evolution of China's export product space during 2000–2011. Econometric analyses suggest that the evolution of export product space in China is heavily driven by relatedness between export products, indicating that regional industrial diversification is path‐dependent. Chinese national and local governments can exert significant influence on the evolution of export products by using export and FDI‐related policies and by establishing development zones. More importantly, national and local governments have played conflicting roles in China's regional industrial dynamics.
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