Social Sciences in China (Chinese Edition)

No.12, 2018

 

The Consumption-Driven Effect of Location-Oriented Industrial Policy—An Empirical Study Based on Development Zone Policy

(Abstract)

 

Sun Weizeng, Wu Jianfeng and Zheng Siqi

 

Can the development zone policy that pioneered Chinese industrialization energize the consumption of urban residents and become an important means of achieving the coordinated development of industrialization and urbanization? We utilized the policy impact of the upgrading of provincial-level development zones to conduct empirical research on the consumption-driven effect of development zone policy using the dual-difference model. Our findings show that the upgrading of development zones is important in raising urban residents’ total consumption, personal consumption, housing consumption and expenditure on children’s education. This is mainly due to the increase in productivity brought about by the upgrading of the zones. However, in cities that have stricter household registration systems, greater restrictions on the purchase of housing by the floating population and less social harmony, the labor force is less willing and less able to consume, so that it is hard to expand domestic demand.