Conference Agenda

This study empirically investigates for the first time how spatial continuity in municipal governments’ industrial expansion strategies affects urban productivity. Using a novel dataset of 319,276 industrial land parcels supplied between 2008 and 2016 in 285 Chinese cities and an indicator borrowed from the geography literature, we directly measure the changes in industrial spatial expansion based on local governments’ industrial-land-supply behaviors. We find that spatial changes significantly hinder city-level total factor productivity (TFP) in the following year, and this effect is robust to alternative variables and strategies for addressing endogeneity. Nevertheless, the negative impact of spatial changes on TFP growth is more prominent in scenarios of overadjustments (in periods with larger changes, in regions with larger changes, and for the higher-than-median changes). By decomposing the TFP and the spatial change indicator, we further show that local governments create “short-lived” industrial zones that result in productivity losses, particularly the losses in technological progress due to the depressed innovation activities of local corporates. The political career incentives of local government leaders provide a plausible explanation for the above results, as we find that more spatial changes are associated with a higher ex-post promotion probability of the incumbent leader.

Poorly defined property rights are a key factor limiting the urban renewal process. Based on the reconstruction case of Pazhou village in Guangzhou, we analyzes the process and benefit distribution of urban village reconstruction, which is divided into three stages: reconstruction preparation, reconstruction implementation, and reconstruction operation, and mainly involves three types of stakeholders: government, developers, and village collectives. The government has a strong voice in the formulation of urban renewal projects, developers generally form a community of interest with the government, while villagers have a weak voice and take collective action as a way to enhance their bargaining power. Pazhou Village renovation mainly through market-based operation, provides a rare reference about the distribution of benefits.

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The Chinese government has implemented the city cluster policy (cheng shi qun zheng ce) for several years to promote cross-provincial market integration and create a national unified market. However, the policy's impact on market segmentation across provincial boundaries and the potential emergence of new economic boundaries within provinces remains unknown without empirical evidence. Using large-scale traffic flow data from 2004 to 2018 in Chinese cities, this study estimates the market segmentation across provinces and disparities within provinces and then assesses the effect of the city cluster policy on market integration and inequality. Our findings indicate that the city cluster policy has not significantly increased traffic flows in boundary cities, even when included in the same cluster as their neighboring cities in other provinces. Instead, the policy has led to increased traffic flows in central cities of each province, particularly those that are economically developed. This trend may be due to the fact that the policy has accelerated the strong alliance between developed cities in different provinces through cross-cutting connections such as aviation, railways, and the internet. To this end, our results suggest that the city cluster policy has not weakened market segmentation caused by administrative boundaries, but rather increased market inequality within a province as a new economic boundary.

Cities around the world are proposing ambitious carbon reduction targets to combat climate change. We aim to investigate the causal effect of carbon targets on government's land supply. Using a discontinuity regression design, this study found that an ambitious carbon target reduces local governments short sight behavior and increase land supply for green industry. The interaction of economic targets and carbon targets matters for government’s behavior responses. Our work contributes to understanding land use transformation in the context of carbon neutrality.