How do industrial land price and environmental regulations affect spatiotemporal variations of pollution-intensive industries? Regional analysis in China

Abstract

The spatial agglomeration of pollution-intensive industries (PIIs) leads to an increase in environmental risks. Land price and environmental compliance costs are important elements of the production costs of PIIs, which may affect the location selection of PIIs and further affect industrial distribution. However, there is a lack of research into the impacts of the incompletely competitive industrial land market on the distribution of PIIs. Moreover, the impacts of environmental regulations on PIIs are also controversial. This study characterizes spatiotemporal variations of PIIs at a city level in China from 2007 to 2016 with the newly-expanded industrial land use data and establishes a geographically weighted regression model to estimate the impacts of industrial land price and environmental regulations on the distribution of PIIs. The results are as follows: 1) PIIs tend to be relocated to the less developed area of western China. Due to the relatively lower land and labor costs in western China, land use by PIIs in this area as a proportion of the national total gradually increases, and new high-density areas of PIIs are formed in the northwest region of China. 2) PIIs are sensitive to land cost and tend to locate where the industrial land price is low, and with the marketization level of industrial land being higher, the negative impacts of industrial land price on PIIs become stronger. 3) The regression results for environmental regulations do not support the pollution haven hypothesis. Regional differences in the production costs caused by the improvements in environmental regulation intensity are not sufficiently large to form a pollution haven. This study uses newly-expanded industrial land use data to characterize the distribution of PIIs, which can directly reflect the location selection of PIIs. Moreover, the inter-city analysis can contribute to a deeper understanding of the relocation of PIIs in China at finer geographical scales. According to the results obtained, a reasonable industrial guidance mechanism need to be established to promote environmental equity, and land markets need to be further perfected to optimize the industrial layout.