Skip to Main Content

In the benchmark regressions in Table 2, we do not control for prefecture fixed effects, as corruption may be related to local culture. Table 8 shows the results with these prefecture fixed effects. Here, we see that the coefficients on corruption are reduced sharply, except that the coefficients on industrial land increases. Comparison with Table 2 suggests that corruption may indeed be related to local time-invariant factors but, even so, the increases in residential and commercial land supply still exhibit very strong correlations with corruption. Also intriguing is the fact that the effect of corruption on industrial land increases (and even becomes significant for industrial land revenue) compared with Table 2. This suggests that industrial activity is less correlated with local time-invariant factors, likely because industrial activities are quite mobile across locations.

Table 8. 
Robustness Check—Corruption—with Prefecture Fixed Effects
ln(increase in land supply)ln(land sales revenue)
TotalResidentialCommercialIndustrialTotalResidentialCommercialIndustrial
Variables(1)(2)(3)(4)(5)(6)(7)(8)
ln(GDP increase) 0.0456 −0.00780 0.0492 0.00529 −0.00646 0.00603 0.0192 0.00550 
 (0.0413) (0.0560) (0.0664) (0.0700) (0.0492) (0.0656) (0.0640) (0.0585) 
ratio of GDPs (tertiary to secondary) −0.344 −0.219 −0.735** −0.627* −0.413* −0.487 −0.429 −0.563* 
 (0.216) (0.322) (0.286) (0.374) (0.239) (0.366) (0.276) (0.340) 
fraction of 2-stage (total) 0.238    0.250    
 (0.158)    (0.214)    
fraction of 2-stage (residential)  0.441**    0.0704   
  (0.189)    (0.187)   
fraction of 2-stage (commercial)   0.635***    0.303*  
   (0.168)    (0.161)  
fraction of 2-stage (industrial)    1.126**    1.051* 
    (0.539)    (0.540) 
Constant 7.938*** 6.452*** 2.618** 5.910*** 15.35*** 15.66*** 10.42*** 11.18*** 
 (0.939) (1.256) (1.089) (1.771) (0.982) (1.357) (1.073) (1.488) 
Prefecture FE Yes Yes Yes Yes Yes Yes Yes Yes 
Year FE Yes Yes Yes Yes Yes Yes Yes Yes 
Observations 1,343 1,344 1,341 1,340 1,325 1,344 1,331 1,340 
R2 0.849 0.814 0.760 0.786 0.908 0.872 0.844 0.856 
ln(increase in land supply)ln(land sales revenue)
TotalResidentialCommercialIndustrialTotalResidentialCommercialIndustrial
Variables(1)(2)(3)(4)(5)(6)(7)(8)
ln(GDP increase) 0.0456 −0.00780 0.0492 0.00529 −0.00646 0.00603 0.0192 0.00550 
 (0.0413) (0.0560) (0.0664) (0.0700) (0.0492) (0.0656) (0.0640) (0.0585) 
ratio of GDPs (tertiary to secondary) −0.344 −0.219 −0.735** −0.627* −0.413* −0.487 −0.429 −0.563* 
 (0.216) (0.322) (0.286) (0.374) (0.239) (0.366) (0.276) (0.340) 
fraction of 2-stage (total) 0.238    0.250    
 (0.158)    (0.214)    
fraction of 2-stage (residential)  0.441**    0.0704   
  (0.189)    (0.187)   
fraction of 2-stage (commercial)   0.635***    0.303*  
   (0.168)    (0.161)  
fraction of 2-stage (industrial)    1.126**    1.051* 
    (0.539)    (0.540) 
Constant 7.938*** 6.452*** 2.618** 5.910*** 15.35*** 15.66*** 10.42*** 11.18*** 
 (0.939) (1.256) (1.089) (1.771) (0.982) (1.357) (1.073) (1.488) 
Prefecture FE Yes Yes Yes Yes Yes Yes Yes Yes 
Year FE Yes Yes Yes Yes Yes Yes Yes Yes 
Observations 1,343 1,344 1,341 1,340 1,325 1,344 1,331 1,340 
R2 0.849 0.814 0.760 0.786 0.908 0.872 0.844 0.856 

FE = fixed effects, GDP = gross domestic product.

Notes: Population data are from population census data in 2000 and 2010 and authors’ calculations. GDP data are from City Statistics Yearbook. Land data are from the website of the Ministry of Land and Resources. Standard errors are clustered at the province level and shown in parentheses. The fraction of 2-stage (type) is the fraction of all transactions within that prefecture for that type of land (or total) that use a 2-stage auction. It is used to proxy corruption. *** = p < .01, ** = p < .05, * = p < 0.1.

Source: Authors’ calculations.

Close Modal

or Create an Account

Close Modal
Close Modal