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The Birth of Edge Cities in China: Measuring the Spillover Effects of Industrial Parks

Author

Listed:
  • Siqi Zheng
  • Weizeng Sun
  • Jianfeng Wu
  • Matthew E. Kahn

Abstract

Several Chinese cities have invested billions of dollars to construct new industrial parks. These place based investments solve the land assembly problem which allows many productive firms to co-locate close to each other. The resulting local economic growth creates new opportunities for real estate developers and retailers that develop properties and stores close to the new park. The city mayor has the political clout and the personal promotion incentives to anticipate these effects as he chooses whether and where within the city to build the park. Using several geo-coded data sets, we measure the localized spillover effects of the new parks on local incumbent firm productivity, the growth of retail activity close to the park and local real estate pricing and construction. We document the heterogeneous effects of investment in parks. Those parks featuring a higher level of human capital, a greater level of co-agglomeration among firms within the park, and a smaller share of State Owned Enterprises offer greater spillover effects.

Suggested Citation

  • Siqi Zheng & Weizeng Sun & Jianfeng Wu & Matthew E. Kahn, 2015. "The Birth of Edge Cities in China: Measuring the Spillover Effects of Industrial Parks," NBER Working Papers 21378, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21378
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    4. Anping Chen & Tianshi Dai & Mark D. Partridge, 2021. "Agglomeration and firm wage inequality: Evidence from China," Journal of Regional Science, Wiley Blackwell, vol. 61(2), pages 352-386, March.
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    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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