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The Spillover effect of government relocations on economic growth in Chinese cities

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  • Pang, Jindong
  • Shen, Shulin
  • Zhou, Ningzhe

Abstract

This paper investigates the spillover effect of government locations on economic growth by exploring more than 180 relocation events of city governments in China. Empirical results demonstrate that government relocations improve regional economic growth measured by night lights. This positive effect decreases with the distance to city governments’ new locations. Government relocations are also found to accelerate urbanization. Potential mechanisms include the changes in land conversion and firm birth patterns in the move-in areas. These results indicate that the relocation of local governments can be an effective place-based policy to improve economic growth and urbanization.

Suggested Citation

  • Pang, Jindong & Shen, Shulin & Zhou, Ningzhe, 2024. "The Spillover effect of government relocations on economic growth in Chinese cities," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 104-122.
    • Handle: RePEc:eee:jeborg:v:222:y:2024:i:c:p:104-122
    DOI: 10.1016/j.jebo.2024.04.015
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    Cited by:

    1. Cong Zhang & Zhaojie Han & Chunlai Yuan, 2026. "The path to regional coordinated development: unexpected benefits from government seat relocation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 75(1), pages 1-43, March.
    2. Sun, Cong & Yang, Chao & Sun, Mingchen & Du, Jiangze, 2025. "Blessing or burden? The economic consequences of government proximity for firms: Evidence from government relocation in China," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    3. Lin, Lu & He, Yuanhao, 2025. "Place-based policies and gendered human capital formation: Evidence and mechanisms," China Economic Review, Elsevier, vol. 92(C).

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    Keywords

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    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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