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Industrial parks and urban growth: A political economy story in China

Matthew Kahn (), Jianfeng Wu (), Weizeng Sun and Siqi Zheng ()
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Weizeng Sun: Jinan University

No GRU_2020_023, GRU Working Paper Series from City University of Hong Kong, Department of Economics and Finance, Global Research Unit

Abstract: Over the last 30 years, the Chinese government has invested in new industrial parks with the intent of stimulating urban economic growth. In this chapter, we explore how provincial leaders allocate industrial parks’ investment across cities within their jurisdictions, as they have the major decisionmaking power in the site selection of national and provincial level industrial parks in their province. a political economy framework to explain their priorities in selecting initial park site locations – promoting economic growth, reducing inequality, and rewarding their connected city leaders. We present a revealed preference test of industrial park site selection and document the willingness of China’s provincial leaders to sacrifice economic development in order to reward social connections. We examine the causes and consequences of this potential misallocation of capital.

Keywords: Industrial Park; Urban Growth; China; Social Connection (search for similar items in EconPapers)
JEL-codes: O2 R1 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2020-10-07
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