The idea that skills, technology, and knowledge, are spatially concentrated, has a long academic tradition. Yet, only recently this hypothesis has been empirically formalized and corroborated at multiple spatial scales, for different economic activities, and for a diversity of institutional regimes. The new synthesis is an empirical principle describing the probability that a region enters-or exits-an economic activity as a function of the number of related activities present in that location. In this paper we summarize some of the recent empirical evidence that has generalized the principle of relatedness to a fact describing the entry and exit of products, industries, occupations, and technologies, at the national, regional, and metropolitan scales. We conclude by describing some of the policy implications and future avenues of research implied by this robust empirical principle. C. A. Hidalgo and P.-A. Balland-Contributed equally.

Although the investment-oriented development model for economic growth adopted by Chinese governments has generated spectacular results, the risks of debt-financed urbanisation and economic development have recently become evident in mounting local debts that are undermining the financial system, triggering concerns with respect to local governments’ indebtedness, financial stability and sovereign risk in China. In this paper, we portray the uneven spatial and temporal dynamics of local government debt in China, and examine the ways in which it is intertwined with institutional, political and economic factors. Our analysis shows that while global and national economic conditions have resulted in a dramatic increase in local government debt, particularly in the late 2000s and the early 2010s, the spatial variation of local debt accumulation in China could be partly explained by two institutional factors: land finance and inter-jurisdictional competition. We argue that the behaviour of local governments may harm the long-term future of Chinese cities.

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Pollution haven hypothesis (PHH) and porter hypothesis (PH) offer two different perspectives to understand the relationship between industrial dynamics and environmental regulations. This paper seeks to move beyond existing studies that are based on either the PHH or the PH while neglecting the other, towards an analytical framework that not only pays more attention to the ways in which the PHH and the PH co-exist, but also acknowledges the role of firm heterogeneity and local government intervention. Based on a firm-level industrial dataset and a dataset on China's polluting firms, this paper studies the relationship between environmental regulations and industrial dynamics in China's pollution-intensive industries at the firm level. Empirical results confirm the coexistence of the PH and the PHH. Furthermore, firm heterogeneity and government intervention both have the potential to inflect the relationship between environmental regulations and industrial dynamics.

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