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Moving to opportunity for polluting: Intra-city evidence from China’s land market

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  • Bo, Shiyu
  • Zhang, Fan
  • Zhu, Hongjia

Abstract

This paper provides new evidence on the within-city relocations of polluting sources. We focus on industrial land use, which can create long-lasting effects on pollution distribution. The research design exploits the first comprehensive air-pollution prevention plan in China creating within-city variations on incentives to relocate polluting sources. Using a triple-difference model, we find that after the regulation, the locations of land leased by polluting firms in the cities receiving more stringent regulation are farther away from monitoring stations. Mechanism analysis shows this shift is partly due to the demand side, but primarily driven by land supply decisions: local governments provide new polluting land parcels in more distant areas of the city. We show that the welfare gains from improved air quality are partly offset by losses in production due to remote locations.

Suggested Citation

  • Bo, Shiyu & Zhang, Fan & Zhu, Hongjia, 2026. "Moving to opportunity for polluting: Intra-city evidence from China’s land market," Journal of Development Economics, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:deveco:v:182:y:2026:i:c:s0304387826000933
    DOI: 10.1016/j.jdeveco.2026.103810
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    Keywords

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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