Land Prices and Intracountry Industrial Relocation in China

Abstract

This article investigates the major role of high land prices in the current massive intracountry industrial relocation from coastal to inland areas in China. A conceptual model is developed to explore the causalities of urban expansion, land prices, and coastal-to-inland business relocation. It demonstrates that relocation is mainly driven by high land prices resulting from urban expansion. Research is based on in-depth field studies of several representative relocated firms in the Yangtze Delta area. The findings derived from the case studies support the theoretical model and empirically validate the hypothesis.