Industrial Land Price Rise, Local Government Land Supply Behavior and Industrial Transfer

Huang Jinsheng, Chen Ligen, Zhao Aidong

Journal of Shanghai University of Finance and Economics Vol. 19, Issue 05, pp. 4 - 14 (2017)  DOI:10.16538/j.cnki.jsufe.2017.05.001

Abstract

The rising prices of industrial land induce the industry relocation of firms and the land leasing behavior of local governments can affect the formation of the gradient force of land prices required by industrial transfer. Firstly this paper theoretically analyzes the general mechanism of industrial transfer promoted by the rise in land prices. And then from a perspective of micro firms, it discusses the effect of the land leasing behavior of local governments on industrial transfer. Finally based on the city-level panel data from 2007 to 2013, this paper empirically investigates the relationship between industrial land prices, the land leasing behavior of local governments and industrial transfer in China.The results show that there is significant negative correlation between the relative prices of industrial land and the relative ratio of the secondary industry, indicating that the rising cost of industrial land can contribute to the industrial transfer; non market-oriented land leasing practiced by local governments impedes the formation of the gradient force of land prices required by industrial transfer, thereby being bad for industrial transformation and upgrading; the relative prices of industrial land have the most significant effect on the relative ratio of the secondary industry in the eastern-central city groups and the effect of the relative prices of industrial land on the relative ratio of the secondary industry in eastern-western city groups is contrary to expectation, indicating that there is a general trend of industrial transfer in China from the eastern China to the central and eastern China. It suggests that the land leasing price marketization should be deepened in central and western China to contribute to the formation of the gradient force of land prices required by industrial transfer and promote the rational and coordinated development of industrial structure.

Keywords

industrial land price; industrial transfer; local government; land leasing behavior; marketization