Industry location in Chinese provinces: Does energy abundance matter?

We identify the driving factors of manufacturing activity across Chinese provinces with a particular focus on energy endowments. A model of production location is estimated, including both comparative advantage and economic geography determinants. The data set used consists of a panel of 28 Chinese provinces and 12 manufacturing industries over the period 1999–2009. Results confirm the relative importance of energy endowments. We find that larger energy endowments are significantly correlated with larger production of energy-intensive sectors. Disaggregation across energy carriers shows that coal exhibits the strongest impact. These results are robust across alternatives.