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Land Use Policy and Employment Growth- Evidence from China

Author

Listed:
  • Qiao Wang

    (School of Economics and Management, Southeast University)

  • Xiuyan Liu

    (School of Economics and Management, Southeast University)

  • Sam Hak Kan Tang

    (Business School, The University of Western Australia)

  • Cong Du

    (School of Economics and Management, Southeast University)

Abstract

This paper examines the causal effect of land use policy on employment growth in Chinese cities. We find that a stricter Floor Area Ratio Regulation (FARR) leads to a reduction in employment growth in Chinese cities- a one standard deviation reduction in FARR leads to a concurrent reduction of employment growth by 1.1-1.6 percentage points. More populated cities and labour-intensive manufacturing industries are found to be more severely affected by stricter FARR. Moreover, the effect of a stricter FARR is found to be less pronounced on state-owned firms compared to foreign-owned and privately-owned firms. Our main conclusions are robust to a variety of sensitivity tests, different instruments and alternative estimators. They suggest that imposing a stricter legal FARR incurs considerable employment costs for Chinese cities.

Suggested Citation

  • Qiao Wang & Xiuyan Liu & Sam Hak Kan Tang & Cong Du, 2021. "Land Use Policy and Employment Growth- Evidence from China," Economics Discussion / Working Papers 21-08, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:21-08
    Note: MD5 = ee00230865874fbdb4568b1c13d4ef9b
    as

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    File URL: https://ecompapers.biz.uwa.edu.au/paper/PDF%20of%20Discussion%20Papers/2021/DP%2021.08%20Wang%20Liu%20Tang%20and%20Du.pdf
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    More about this item

    Keywords

    Land Use Policy; Floor Area Ratio Regulation; Employment Growth; Latitude; Earthquake Protection;
    All these keywords.

    JEL classification:

    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • 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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