Industrial Land Price Research Articles

Applying the LightGBM model and SHAP interpretation to understand the urban land price index and its influencing factors in China

ABSTRACT Investigating the key factors affecting land prices is conducive to establishing targeted market-oriented reforms of the land market and promoting its healthy development. Traditional linear analysis cannot comprehensively compare the importance of feature variables and is unable to analyse the nonlinear influence process of feature variables. Therefore, based on the land transaction dataset from 2011 to 2020 in China, we used machine learning and the Shapley Additive exPlanations method to analyse the importance ranking of factors affecting land prices and analyse the nonlinear influence processes. The government fiscal, industrial development, and financial system indices are determined as the most important factors affecting residential, commercial, and industrial land price indices, respectively, and each exhibits different characteristics. The financial system index exerts the strongest impact on land price indices in large cities, whereas transportation and communication indices are the most dominant in small cities. Moreover, industrial development index is the most important influencing factor in industrial cities, whereas regional economic index exerts the greatest impact in small cities. By employing machine learning methods, we determined nonlinear effects that traditional linear models fail to obtain. Based on the results, we propose policy recommendations for market-oriented reforms on the land market, real-estate policies, and a stable monetary system.

Land price regulation and firms' global value chain position: Evidence from China

Exorbitant land prices have been a significant constraint on firm growth; however, few studies have explored their effect on firms' global value chain (GVC) positions. By treating the 2007 minimum price policy for industrial land as a quasi-natural experiment, this study estimates the impact of land price regulations on firms' GVC positions. Using a difference-in-differences method with continuous treatment intensity, we find that industrial land price regulation has a remarkably negative effect on firms' GVC positions. This effect is primarily observed in small- and medium-sized enterprises and private enterprises. The mechanism analysis suggests that industrial land price regulation has significantly increased the cost of land purchases by firms, squeezing their investment in innovation and reducing the quality of intermediate inputs, thereby degrading their position in GVCs.

Does land market matter for urban energy efficiency? Empirical evidence from cities in China

Improving urban energy efficiency on the basis of cost-effectiveness is an important topic of universal concern across the world. The input cost has great influence on energy efficiency. Thus, as one of the important factors in the production progress, land price may exert an energy effect via affecting the urban industries. With a focus on land price levels and the variability, our study investigates the impact of land market on urban energy efficiency, based on the panel data of China's prefecture-level cities. Further, by exploring effects of the segment land markets, our study reveals the exact price features in land market that have driven the changes in energy efficiency of cities. The main results are: (a) Either of the price level and the price variability in urban land market has a positive net effect on energy efficiency. When price level and variability increase by 1%, urban energy efficiency respectively increases by 0.06% and 0.04%, and the effects vary with city's population size and geographic location; (b) An increase of land price level improves energy efficiency by optimizing industrial structure and reduces energy efficiency by weakening industrial production efficiency, while an increase in land price variability exerts a positive impact on energy efficiency by adjusting industrial structure; (c) The price level factor affecting urban energy efficiency is mainly the commercial-residential land prices, while the difference between commercial-residential and industrial land prices is the variability factor that affects energy efficiency.

Heterogeneous mechanisms of urban land price in China: a perspective of natural restrictions and strategic supply

Analyzing how the underlying mechanism influences land value changes is essential to understanding the land market, which contributes to sustainable urbanization. Drawing upon a land transaction dataset, we analyze the determinants of urban land prices from 2008 to 2020, considering land supply and demands, with particular attention to natural restrictions and government interventions in China. The statistical analysis suggests that the inequality in industrial and commercial land prices rose from 2008 to 2015 and decreased after 2015. The inequality in residential land prices has kept rising from 2008 to 2020 because land finance is still essential to local government. Discriminatory price strategy for industrial land prices in eastern China is getting more popular. The regression models reveal the significant negative impact of natural restrictions on land price, and such impact from natural restrictions is decreasing after 2015. The market forces represented by city-level socioeconomic factors are becoming more important after 2015, indicating a more free land market in China. We also find the gaps between cities and counties in land prices are closing, which might benefit the recent development in rural and county region of China. These findings provide important insights into the transition in the land market in China from 2008 to 2020, which also contribute to a better understanding of the spatial inequality in the land market and the heterogeneity in different land-use types.

禹城市集体工业用地价格评估与影响因素研究

禹城市集体工业用地价格评估与影响因素研究

Exploring the Impact of Industrial Land Price Distortion on Carbon Emission Intensity: Evidence from China

In the context of tax sharing reform and land reform during the 1990s, local governments in China relied heavily on land finance. Local governments have fierce competition in attracting investment, omitting the development of green economy. Based on the data of industrial land sales and carbon dioxide emissions, this study constructed the panel data of 196 cities in China from 2007 to 2017 and analyzed the spatial and temporal evolution characteristics of urban industrial land price distortion and carbon emission intensity. Furthermore, a multiple linear regression model was constructed from the aspects of scale effect to empirically analyze the overall impact and differential impact of urban industrial land price distortion on carbon emission intensity. With the help of the mediating effect model, the mechanism of urban industrial land price distortion on carbon emission intensity was investigated from the perspective of industrial structure upgrading. The results showed that (1) the higher the price distortion of industrial land is, the more detrimental it is to the development of green and low-carbon economy. (2) The regional heterogeneity test showed that the impact of industrial land price distortion on carbon emission intensity is most significant in the central region, medium cities, and cities with low fiscal self-sufficiency rates, respectively. (3) The higher the distortion degree of industrial land price, the greater the restriction on the upgrading of industrial structure, further increasing the carbon emission intensity. This paper provides policy implications for the market-oriented reform of land factors and the realization of the “double carbon” goal.

Exploring the Effects of Industrial Land Transfer on Urban Air Quality Using a Geographically and Temporally Weighted Regression Model.

This paper explores the spatial-temporal heterogeneity of the impact of industrial land transfer on urban air quality using the air quality index (AQI) and primary land market transaction data of 284 cities from 2015 to 2019 in China. Based on a three-dimensional conceptual framework including scale, price and style effect of industrial land transfer, we find that: (1) The scale effect shows an obvious characteristic of spatial agglomeration, and the agglomerations transfer from central and northern China to the western and southeast coastal regions. (2) Industrial land transfer price has a greater impact on air quality than transfer scale no matter whether the effect is positive or negative, which may be because the expansion scale of construction land is restricted strictly by indicators. (3) The scale of industrial land transferred by agreement in the west and northeast will reduce the air quality. (4) The impact of industrial land price transferred by bidding, auction and listing on AQI is gradually decreasing, but that of land transferred by agreement is still high in the northwest and northeast regions. Finally, we put forward policy recommendations based on the spatial and temporal heterogeneity of these effects, which will help alleviate or avoid environmental problems caused by land resources mismatch and industrial development.

LAND MARKETIZATION, SECONDARY LAND MARKET, AND EFFECTS ON INDUSTRIAL LAND PRICE

Land marketization and its effects are widely documented across developing countries. Few studies, however, have investigated the link between industrial land price determination and industrial land market reform, based on the establishment of a pilot open trading platform for the secondary market. Moreover, no studies have specifically examined the link between primary and secondary industrial land markets. This study, therefore, investigates industrial land price determination using a quasi-natural experiment to interpret distortions in industrial land prices in China. Using industrial land sales data for 2006–2017 in the city of Haining, Zhejiang Province, China, this study compares industrial land value in the secondary market with land transfer prices in the primary market and identify undervaluation in the primary market. The results show that the growth rate of industrial land transfer prices increased every year after the open trading platform was established. Moreover, compared with nonpilot districts and counties, industrial land prices in the pilot city (Haining) increased by 11.14% from 2015 to 2017. The findings suggest that, based on the pilot program, further market reforms should be undertaken by establishing open trading platforms in a broader area.

Analysis of the factors influencing industrial land leasing in Beijing of China based on the district-level data

In this paper, by discussing the factors influencing industrial land leasing, the district government behavior for leasing industrial land in Beijing of China is investigated based on the mathematical models of leased industrial land price and total leased area. The factors influencing the district government behavior for leasing industrial land are considered as the variables in the models. From the ordinary least squares method, the regression formulae of the mathematical models are obtained. By collecting the data of the variables of the influencing factors in all districts of Beijing from 2008 to 2015, the numerical results of the coefficients of the influencing factors in the mathematical models are obtained from the regression formulae. After discussing the results, it is shown that the price and the total area of the leased industrial land have relationship with some factors. Finally, the policy implications of local district government behavior are proposed.

Investment Promotion, Tax Competition, and Industrial Land Price in China—Evidence from the Corporate Tax Collection Reform

Fiscal arrangements have significant influences on the use of land in China. The tax collection reform in 2002 stipulates that firms establish after the reform are levied by the state tax bureau while those established before the reform continue to be levied by local tax bureaus. The reform divided similar firms into two groups by the date of establishment and created a discontinuity in the tax enforcement for those firms established around the date of the reform. Based on the land transaction data on a parcel basis, we used the regression discontinuity design to study the impact of reform on industrial land prices. We found that the reform has resulted in significant discontinuities in land prices. The firms levied by the state tax authority receive lower land prices relative to the same type of firms that are levied by local tax authorities. The intuition is that tax collection reform has brought an exogenous constraint on local governments’ ability to engage in tax competition. As a countermeasure, local governments use low-cost land as another way to attract investment.

Analysis of the Impact of Industrial Land Price Distortion on Overcapacity in the Textile Industry and Its Sustainability in China

At present, China is faced with a situation of unbalanced regional economic development. The report of the 19th session of the national congress of the Communist Party of China pointed out that we should accelerate the implementation of the strategy of coordinated regional development. However, this study finds that, in the process of “leaving the cage and changing birds”, the number of enterprises in the textile industry in the eastern region has risen again, which, in turn, has led to overcapacity and has seriously affected the sustainable development of the textile industry. The present study finds that the increasingly distorted price of industrial land is the root cause of the “surge phenomenon” of enterprises in the textile industry and overcapacity. Therefore, China’s central government should be fully aware of the negative impact of the distorted price of industrial land on the sustainable development of textile industry. Efforts must be made to solve the problems of the excessive influx of textile enterprises, overcapacity, and unsustainability in the eastern region in three aspects. Specifically, the land transfer procedure should be standardized, the motivation of local governments’ land attracting investment should be curbed, and the introduction of high-quality enterprises should be paid attention to.

Two‐stage development, allocation strategies' effect, and industrial land policies' adjustment, China

AbstractLocal governments are faced with ‘financial’ and ‘political’ double‐pressure to attract business investment with the low‐price industrial land in China. This study tests the effect of industrial land allocation strategy on local tax and employment using the Driscoll‐Kraay (D‐K) standard error fixed‐effect model in different stages. The empirical results indicate that the taxation and employment‐pulling effects are still effective in the full‐sample model. However, in the stage of rapid economic development (2007–2012), the interaction term coefficient between industrial land scale and price is –0.026 and is significant at 5% level. This result suggests that the low‐price and large‐scale industrial land allocation strategies of local governments have a significant impact on the tax. For every 1% decrease in industrial land price, the regional employment growth is 0.071%. In the structure transformation stage (2013–2019), the industrial land scale can influence increasing local taxation. The effectiveness of local government industrial land allocation strategy on regional employment is weakened.

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

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.

Effects of government competition on land prices under opening up conditions: A case study of the Huaihe River ecological economic belt

This paper considers government competition and other behaviors under open conditions. Based on urban data for the China Huaihe River ecological economic belt from 2004 to 2016, we establish an interactive effect panel data model. An iterative algorithm is adopted to analyze the factors influencing the prices of comprehensive land, commercial land, residential land, and industrial land. The empirical results show that population density is the most important factor affecting land price. Except for industrial land, the positive and negative effects that various factors have on land price for other uses remain consistent. Due to the distortion of industrial land price, the sensitivity of land price for different cities and uses to policy and institutional changes varies. Therefore, to achieve the optimal allocation of resources, government departments must reasonably control the population flow in cities, avoid blind competition between governments, implement land policies in a targeted manner in accordance with local conditions, and improve and adjust the structure of land supply and demand.

Land misallocation and urban air quality in China.

In China, the local government's "land for development" strategy has led to a large number of urban construction land allocated to the industrial field, which has promoted the rapid development of industry and economy in the short term but also brought serious environmental quality losses. This paper systematically sets out how land misallocation works on urban air quality and employs the spatial Durbin model (SDM) to conduct an empirical analysis on the panel data of 283 China cities at or above the prefecture level. The result shows that, stimulated by financial maximization and political promotion, in order to obtain more fiscal revenue and growth performance, local governments prefer to allocate a large number of urban construction land to industry and related fields, which leads to the underestimation of industrial land price and the misallocation of land resources. Land misallocation has exerted significant inhibiting effects on the air quality of local and their surrounding cities through inhibiting the upgrading of industrial structure. Further analysis reveals that the bigger the city, the lesser the inhibition effects of land misallocation on upgrading of industrial structure and urban air quality and vice versa. The conclusions of this paper can provide a useful reference for local governments to optimize land allocation, promote economic restructuring, and environmental quality upgrading.

HOW DO LAND USE REGULATIONS INFLUENCE INDUSTRIAL LAND PRICES? EVIDENCE FROM CHINA

Due to low industrial land prices and inefficiently used industrial land, China’s central government has reformed land regulations in order to promote more market-oriented industrial land. Considering the differences in land management between developed and developing countries, this study aims to investigate the impact of land use regulations on industrial land prices in China and the effect of market-oriented reforms of industrial land policy. Measures that capture multiple dimensions of land use regulation tools are incorporated into OLS models based on a micro dataset from 1999 to 2016 that covers Jiaxing City in Eastern China. The results show that (1) The land policy implemented in 2006 to promote industrial land marketization has had a very limited effect; (2) The impact of land supply on industrial land prices was decreased for land transferred through listings after 2006, which implies an immature marketization; (3) Zoning instruments has obvious effects on industrial land prices; (4) The results imply that the effect of land use regulations varies with firm ownership and development zones. The findings in this paper clearly show that the industrial land market should be more open and competitive and combined with a rational land supply to promote the market-oriented price mechanism.

FISCAL EXPENDITURE AND INDUSTRIAL LAND PRICE IN CHINA: THEORY AND EVIDENCE

This paper aims to discover the mechanism behind the positive correlation between local fiscal expenditure and industrial land price in China, a stylized fact discovered by bivariate and regression analyses. The model shows that if the positive externality of government expenditure on growth is sufficiently high, the local government has an incentive to increase public spending in exchange for the reduced demand for industrial land by charging a higher markup and driving up the industrial land price. Therefore, we observe a positive correlation between the local fiscal expenditure and industrial land price. (JEL D42, H72, R51)

Local economic structure, regional competition and the formation of industrial land price in China: Combining evidence from process tracing with quantitative results

The price of industrial land in China has been found distorted and remarkably low. However, it is overlooked that industrial land price is relatively high in some regions. This local variation cannot be explained by classical theories on land price that focus on local economic level, population density, and location factors. We propose a theoretical framework incorporating local economic structure and governments’ behavior in regional competition, to interpret the formation of industrial land price in China. We first model local firms as foot-tight ones, whose relocation costs are enormous, and outside firms as foot-loose ones, whose relocation costs are negligible. Then we divide local governments as outside-capital-dependent governments (OCDGs) and non-outside-capital-dependent governments (NOCDGs) according to the role of outside capital in local economic structure. In such a setting, OCDGs are supposed to aggressively pursue outside firms and use industrial land as a critical endowment to engage in race-to-bottom competition, making the price extremely low. On the contrary, the optimal strategy for NOCDGs, who lack strong incentives in attracting outside investment, is to stay aside and let potential land users compete to determine the land price, resulting in a higher land price. Evidence from quantitative results and comparative case studies with process tracing based on Suzhou and Wenzhou together prove the validity of this theory. This paper advances the conventional understanding of industrial land price and concludes with implications on industrial land policies and sustainable development.

Spatio-Temporal Nonstationary Effects of Impact Factors on Industrial Land Price in Industrializing Cities of China

Industrialization has brought about great differences in industrial development and land use demand among different regions and cities, especially in rapidly industrializing countries with a vast territory. In those areas, implementing local-specific policies on industrial land price is of great significance to improve industrial land use efficiency and facilitate the sustainable development of regional economy. Based on the land pricing monition files of 105 industrializing cities, geographically weighted regression (GWR) was applied to detect the spatial variation of the industrial land price and its main impact factors (for example, tax, leased land, population, and location quotient index) in China in 2009, 2011 and 2014. The results show that the relationships were generally spatio-temporally nonstationary. More specifically, while the effect of tax on industrial land price was significantly positive and spatially stable all over China in 2009, the effect varied spatially in the two later studied years, weakened in North and East China and strengthened in South China. The effect of leased land on industrial land price was generally negative; it was very weak in 2009 and 2011 but became negatively strong in most studied cities in 2014, except for a few cities in Middle China. Population had a significant positive effect on industrial land price in the cities of East and Northeast China. For the three studied years, the location quotient index always had negative effect in Bohai Economic Rim and positive effect in Yangtze River Delta Economic Zone, and the negative effect strengthened with time. Meanwhile, the underlying reasons behind the relationships were further analyzed, showing that the spatio-temporal changes of industrial land price are closely correlated with the population mobility, industrial agglomeration, government intervention and economic situation.

Do land price variation and environmental regulation improve chemical industrial agglomeration? A regional analysis in China

China’s governments have a strong control over resources, such as land resources, and determine environmental policies for the nation. As an essential part of the production cost of chemical enterprises, land price and pollution costs play a critical role in location selection. However, whether the current incompletely competitive industrial land market and improving environmental regulations in China would affect chemical industrial agglomeration (CIA) is unclear. This study incorporates the land price variations, environmental regulation, and CIA into one research framework. Calculation methods of industrial land price variation (LPV), environmental regulation (ERI), and CIA are established, to reveal their development level. Furthermore, a geographically and temporally weighted regression (GTWR) model is established to estimate the spatial and temporal impacts of land price variation and environmental regulation on CIA by using a panel data from 2007 to 2015. The results show significant spatial differences in the impacts of land price variation and environmental regulation on CIA between cities. The majority of the impacts of land price variation and environmental regulation on CIA are negative. However, the temporal change in the impacts are not as significant as the spatial change. Other control variables, namely, free trade, natural resources, and highway density, have a positive impact on CIA.