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The birth of edge cities in China: Measuring the effects of industrial parks policy

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  • Zheng, Siqi
  • Sun, Weizeng
  • Wu, Jianfeng
  • Kahn, Matthew E.

Abstract

China's government has spent hundreds of billions of dollars to invest in new industrial parks with the intent of boosting the economic growth, by attracting new firms into the parks and also generating spillovers for the local economy. Do such place-based investments in capital raise urban productivity or is this another case of the powerful state misallocating capital in China? This paper measures the localized spillover effects of 110 parks built in eight major cities on firm productivity, wages, and local manufacturing employment growth. We find that the geographic spillover effect of parks is an increasing function of the park's overall human capital level, the FDI share, and its “synergy” with nearby incumbent firms (measured by Marshallian factors). Using geo-coded data, we document that the growth in local employment and wages stimulates nearby local housing construction and retail store openings. The rise of a new production sub-center causes the emergence of a suburban “consumer city”.

Suggested Citation

  • Zheng, Siqi & Sun, Weizeng & Wu, Jianfeng & Kahn, Matthew E., 2017. "The birth of edge cities in China: Measuring the effects of industrial parks policy," Journal of Urban Economics, Elsevier, vol. 100(C), pages 80-103.
  • Handle: RePEc:eee:juecon:v:100:y:2017:i:c:p:80-103
    DOI: 10.1016/j.jue.2017.05.002
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Nuances about Using the Supply and Demand Model in Urban Economics
      by Matthew Kahn in Environmental and Urban Economics on 2018-07-18 16:10:00

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    1. repec:gam:jsusta:v:10:y:2018:i:6:p:1766-:d:149367 is not listed on IDEAS
    2. Blakeslee, David & Chaurey, Ritam & Fishman, Ram & Malik, Samreen, 2018. "Structural Transformation and Spillovers from Industrial Areas," IZA Discussion Papers 11886, Institute for the Study of Labor (IZA).
    3. repec:eee:regeco:v:71:y:2018:i:c:p:25-36 is not listed on IDEAS

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