Factor Prices and the Construction of New Development Paradigm:Evidence from the Industrial Land Prices and Firms'Market Choice
Extensive literature has investigated the miracle of China's export growth,but only a few studies explain the fact that the absolute size of China's goods exports has increased while the relative size of its exports(the export-to-output ratio)has continued to decline.This study combines the factor market with the product market to explore how rising industrial land prices affect firms'domestic and international market choices and provide insights into why the relative size of Chinese manufacturing exports has declined.We first set up a theoretical model by incorporating land costs into a heterogeneous firm model to analyze the effect of rising industrial land prices on firms'export and domestic sales decisions.We find that the rising industrial land prices increase the cutoff of productivity in both domestic and export markets,thus changing their output distribution and choices in these two markets.Moreover,rising land prices lead to a proportion of firms whose productivity lies on the export threshold switching from exports to domestic sales,leading to a greater increase in domestic sales.Second,an empirical analysis based on the industrial land transaction data and the ASIF datasets reveals that an increase in industrial land prices significantly decreases the manufacturing export-to-output ratio.Moreover,the effect of rising land prices is stronger for private and foreign firms,low-technology-intensive industries,and the eastern region.In addition,to overcome the potential endogeneity issue,this study uses the National Minimum Price Standard for Industrial Land Transfers implemented in 2007 and sets up an instrumental variable for land prices.The robustness of the empirical results is further verified by eliminating the sample of processing trade firms,excluding the impact of statistical standard changes,and changing the measurement of variables.The mechanism of the redistribution effect of land prices on manufacturing output in domestic and export markets is also tested.First,by decomposing the ratio into domestic sales and exports,the results reveal that rising industrial land prices significantly increase domestic sales,while the promotion effect on exports is insignificant.The cost effect of rising industrial land prices has a heterogeneous impact on firms'domestic sales and exports of different productivity levels.Rising industrial land prices reduce the exports of low-productivity firms and help high-productivity firms increase their domestic sales and exports.Second,this study finds that domestic sales increase more than exports,and we further explain this phenomenon through empirical tests and data analysis.An increase in industrial land prices not only makes continuous exporters shift their output from exports to the domestic market but also makes less productive exporters exit the export market and shift to the domestic market.Thus,higher industrial land prices'switching effect reduces the manufacturing export-to-output ratio.The market-oriented reform of land factors will help high-productivity firms to effectively allocate resources in the international and domestic markets,thereby promoting the construction of the New Development Paradigm.The main contributions of this study are as follows:First,it enriches the relevant literature on the impact of land policies and land prices in China,with theoretical analyses and empirical research on whether and how industrial land prices affect firms'market choices,thus broadening the research on the effects of land marketization.Second,it discusses the new situation and challenges confronting China's export development.By combining the land factor market with the product market,this study explores how rising land prices affect the coordinated development of domestic and foreign markets and provides a useful exploration of the"dual circulation"development paradigm based on the perspective of reforming the land factor market.
Industrial Land PriceManufacturing Export-to-output RatioMarket Choices
NETL
NSTL
万方数据
