Government-Directed Urban Growth, Firm Entry, and Industrial Land Prices in Chinese Cities

Jan K. Brueckner, Wenhua Liu, Wei Xiao and Junfu Zhang

No 10181, CESifo Working Paper Series from CESifo

Abstract: We examine the effect of a large-scale administrative reorganization in China, where counties are annexed into cities to accommodate urban growth. We present a simple model to illustrate how this annexation may affect firm entry decisions and in turn land market outcomes. Using nationwide data on land-lease transactions, we find that annexation raises industrial land prices in the annexed counties by 7 percent but does not reduce land prices in neighboring counties and central cities. We show that the annexed counties experienced increases in firm entry and investment, offering a plausible mechanism for the effect on industrial land prices.

Keywords: urban growth; industrial land prices; annexation; China (search for similar items in EconPapers)
JEL-codes: R11 R12 R14 R33 R58 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-cna, nep-geo, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10181

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