A new study finds that industrial parks in China have led to the growth of nearby "edge cities" that are hubs of diverse economic activity and residential life. The researchers looked at 110 industrial parks near eight cities in China, including the city of Wuhan, pictured here.
China's massive investment in industrial parks has paid economic dividends while reshaping the urban areas where they are located, according to a newly published study co-authored by an MIT expert on urban economics. The study finds the creation of industrial parks does not just add to growth within the areas designated for manufacturing; it significantly increases economic production and consumption of many kinds for more than a mile in all directions from the boundaries of industrial parks. Indeed, as the research shows, productivity, wages, employment, home sales, and retail activities all increased, even beyond the boundaries of the planned industrial parks. This carryover was striking enough that the study's researchers say the industrial parks created "edge cities," places that generate their own hubs of diverse economic activity and residential life. "This kind of place-based policy can produce significant gains," says Siqi Zheng, an associate professor in MIT's Department of Urban Studies and Planning (DUSP) and Center for Real Estate (CRE), and co-author of a new paper detailing the findings. The results speak to questions about the value of place-based industrial policy, while also providing valuable new data about economic spillover effects - the extent to which the presence of industries creates additional economic activity.
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