Does the establishment of development zones really improve industrial land use efficiency? Implications for China’s high-quality development policy

Abstract

As a popular form of land use worldwide, development zones (DZs) are selected and supported by authorities to accelerate structural transformation. Although the establishment of DZs is regarded to boost regional economic growth, whether or not it really improves industrial land use efficiency (ILUE) has not been adequately examined. Using firm-level data collected from Hangzhou, a typical megacity in China, geographically weighted regression is first applied to examine the spatially nonstationary associations between ILUE and potential determinants, and variance partitioning analysis is further used to compare the relative importance of the ILUE determinants. Then, hypothesis testing and Heckman selection model are utilized to quantify the impact of different types of DZs on ILUE. Results show, the capital intensity and employee density are major determinants of ILUE, and similar as other policy, agglomeration, location and firm heterogeneity factors, the association between them and ILUE is spatially nonstationary. Moreover, firms in high-tech industry development zones (HIDZs) have significantly higher ILUE, but no matter what the administrative level and development stage of economic and technological development zones (ETDZs) are, the firms in them own significantly lower ILUE. Besides, more intensive firm clusters and preferential policies will not help further improve ILUE for the in-zone firms, and the intensive land use related indicators are insignificant in the selection procedure. In general, DZs influence firm-level ILUE through selection effect, policy effect, cluster effect and location effect. HIDZs successfully promote ILUE of in-zone firms, but ETDZs fail to do so because of the abuse of preferential policy and the weak enforcement of intensive industrial land use policies. Implications are formulated for policy makers to improve ILUE within the context of high-quality development.