Industry Network Structure Determines Regional Economic Resilience: An Empirical Study Using Stress Testing

Abstract

We evaluate the network robustness of industrial capabilities across China’s provincial administrative regions, focusing on their resilience in the wake of the 2008 economic crisis. By adopting a novel network science methodology within the context of economic geography, we leverage co-classification data from the China Statistical Yearbook to conduct stress tests on regional industrial resilience. The findings indicate a considerable variability in robustness among provincial industry networks. Through regression analysis, it is evident that regions with more robust industrial network structures exhibit greater resilience in employment rates in response to both random and targeted disruptions. Notably, regions characterized by high employment levels coupled with weak industrial foundations are identified as particularly vulnerable, facing significant challenges in sustaining economic resilience. This study highlights the imperative for further in-depth research into the relationship between the structural dynamics of regional economic networks and their resilience to economic shocks, emphasizing the critical role of robust industrial infrastructures in enhancing regional economic stability.