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

Author

Listed:
  • Matthew E. Kahn

    (Johns Hopkins University)

  • Jianfeng Wu

    (Fudan University)

  • Weizeng Sun

    (Jinan University)

  • Siqi Zheng

    (Massachusetts Institute of Technology)

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.

Suggested Citation

  • Matthew E. Kahn & Jianfeng Wu & Weizeng Sun & Siqi Zheng, 2020. "Industrial parks and urban growth: A political economy story in China," GRU Working Paper Series GRU_2020_023, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    • Handle: RePEc:cth:wpaper:gru_2020_023
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    File URL: https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232020-023%20Wu_Zheng.pdf
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    More about this item

    Keywords

    Industrial Park; Urban Growth; China; Social Connection;
    All these keywords.

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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