Do China’s economic development zones improve land use efficiency? The effects of selection, factor accumulation and agglomeration

China’s so-called “development zone fever” has been criticized for leading to inefficient land use. This study aims to explore whether and how economic development zones improve land use efficiency. Using land use data on Shanghai’s electronics firms for 2003–2008, this study finds that the average output per land unit of firms within development zones is significantly higher than that of their counterparts outside development zones. Spatial hotspot analysis indicates that land-use efficient firms tend to cluster in development zones. Econometric results suggest that selection effects contribute to the higher levels of land use efficiency of firms in development zones. After controlling for selection effects, both factor accumulation effects and agglomeration effects have impacts on the land use efficiency of firms located in development zones. This study provides empirical justification for the establishment of economic development zones in China.

[1]  Nicole Pohl,et al.  EMPIRICAL EVIDENCE FROM WUHAN'S STATE-LEVEL ECONOMIC DEVELOPMENT ZONES , 2001 .

[2]  The Economics of Place-Making Policies , 2008 .

[3]  Y. Wei.  Zone Fever, Project Fever: Development Policy, Economic Transition, and Urban Expansion in China , 2015 .

[4]  Matthew E. Kahn,et al.  The Birth of Edge Cities in China: Measuring the Spillover Effects of Industrial Parks , 2015 .

[5]  J. Heckman.  Sample selection bias as a specification error , 1979 .

[6]  Dali L. Yang,et al.  The political dynamics of regulatory change: Speculation and regulation in the real estate sector , 1996 .

[7]  E. Lichtenberg,et al.  Land and Urban Economic Growth in China , 2011 .

[8]  A. Marshall.  Principles of Economics , .

[9]  Y. Wei,et al.  Development Zones, Foreign Investment, and Global City Formation in Shanghai , 2005 .

[10]  J. Ord,et al.  Local Spatial Autocorrelation Statistics: Distributional Issues and an Application , 2010 .

[11]  Y. Wei,et al.  Spatial Mismatch and Determinants of Foreign and Domestic Information and Communication Technology Firms in Urban China , 2013 .

[12]  G. Duranton,et al.  Micro-Foundations of Urban Agglomeration Economies , 2003 .

[13]  Junfu Zhang,et al.  Interjurisdictional competition for FDI: The case of China's "development zone fever" , 2011 .

[14]  Douglas Zhihua Zeng,et al.  Building engines for growth and competitiveness in China : experience with special economic zones and industrial clusters , 2010 .

[15]  Matthew E. Kahn,et al.  Incentivizing China's Urban Mayors to Mitigate Pollution Externalities: The Role of the Central Government and Public Environmentalism , 2014 .

[16]  Hongbin Li,et al.  Political turnover and economic performance: the incentive role of personnel control in China , 2005 .

[17]  Jean C. Oi.  Fiscal Reform and the Economic Foundations of Local State Corporatism in China , 1992, World Politics.

[18]  S. Geertman,et al.  Science Parks and the Co-location of High-tech Small- and Medium-sized Firms in China’s Shenzhen , 2014 .

[19]  Xiaolin Guo.  Land Expropriation and Rural Conflicts in China , 2001, The China Quarterly.

[20]  K. Motohashi,et al.  Are new technology-based firms located on science parks really more innovative?: Evidence from Taiwan , 2009 .

[21]  Bin Li,et al.  Industrial land development in urban villages in China: A property rights perspective , 2014 .

[22]  Zhiji Huang,et al.  Fiscal decentralization, political centralization, and land urbanization in China , 2016 .

[23]  A. Yeh,et al.  The New Land Development Process and Urban Development in Chinese Cities , 1996 .

[24]  S. Walcott,et al.  HIGH-TECH PARKS AND DEVELOPMENT ZONES IN METROPOLITAN SHANGHAI: FROM THE INDUSTRIAL TO THE INFORMATION AGE , 2000 .

[25]  Jed Kolko,et al.  Do Enterprise Zones Create Jobs? Evidence from California&Apos;S Enterprise Zone Program , 2008 .

[26]  M. Edin.  State Capacity and Local Agent Control in China: CCP Cadre Management from a Township Perspective , 2003, The China Quarterly.

[27]  Fabrizio Zilibotti,et al.  The Effect of Economic Reform and Industrial Policy in a Panel of Chinese Cities , 2012 .

[28]  Dylan Sutherland,et al.  China's Science Parks: Production Bases or a Tool for Institutional Reform? , 2005 .

[29]  Jae-ho Chung.  Beijing Confronting the Provinces: The 1994 Tax-Sharing Reform and its Implications for Central-Provincial Relations in China , 1994 .

[30]  J. Knight,et al.  Fiscal decentralization: Incentives, redistribution and reform in China , 1999 .

[31]  Barry R. Weingast,et al.  Federalism, Chinese Style: The Political Basis for Economic Success in China , 1995, World Politics.

[32]  Xiaofen Yu,et al.  Industrial land use efficiency under government intervention: Evidence from Hangzhou, China , 2014 .

[33]  Bou-Wen Lin,et al.  Evaluating the development of high-tech industries: Taiwan's science park , 2006 .

[34]  L. Cheng,et al.  What are the determinants of the location of foreign direct investment? The Chinese experience , 2000 .

[35]  Susan M. Walcott,et al.  Chinese Industrial and Science Parks: Bridging the Gap , 2002 .

[36]  Canfei He,et al.  Geographical agglomeration and co-agglomeration of foreign and domestic enterprises: a case study of Chinese manufacturing industries , 2010 .

[37]  Canfei He,et al.  The productivity puzzle of Chinese exporters: Perspectives of local protection and spillover effects , 2014 .

[38]  C. Cartier.  'Zone Fever', the Arable Land Debate, and Real Estate Speculation: China's evolving land use regime and its geographical contradictions , 2001 .

[39]  Andrew C. Inkpen,et al.  An Examination of Collaboration and Knowledge Transfer: China-Singapore Suzhou Industrial Park , 2006 .

[40]  C. Ding.  Policy and praxis of land acquisition in China , 2007 .

[41]  Local Labor Markets , 2010 .

[42]  Jin Wang,et al.  The economic impact of Special Economic Zones: Evidence from Chinese municipalities , 2013 .

[43]  Does Development Zone Have Spillover Effect in China? , 2014 .

[44]  中華人民共和国上海市統計局.  Shanghai statistical yearbook , 1988 .

[45]  Chŏng-dong Pak.  The special economic zones of China and their impact on its economic development , 1997 .

[46]  T. Chou,et al.  Industrial Park Development across the Taiwan Strait , 2007 .

[47]  Canfei He,et al.  Does ownership matter for industrial agglomeration in China? , 2012 .