Abstract: Industrial transfer can play a potential role in adjusting and optimizing the industrial structure through such effects as technology spillover, industrial competition, industrial linkage, and so on. Starting from the perspective of inter-province mergers, this paper makes use of China’s M&A samples during the period of 2011-2013 to conduct an empirical analysis of the industrial upgrading effect resulted from industrial transfer. The results show that industrial transfer in the form of inter-province mergers can promote the undertaking area to achieve the goal of industrial upgrading, while the degree of marketization has a negative effect on the regulation. That may be because China’s local governments try to layout the industrial structure beyond the comparative advantage principle with competitive investment-introducing policies, which accelerates the industrial upgrading process. As for the industrial upgrading in the transfer-out area, industrial transfer fails to produce a significant effect, even there is a threat of industrial hollowing in the eastern developed regions.

Key words: inter-province mergers; industrial transfer; industrial upgrading; industrial hollowing