Ranking, Rent and Relocation

15:30-17:00, Tuesday, November 28, 2023

I-206, Boxue Building, DUFE

Dr. Angdi LU is now an associate professor of Economics at Renmin University of China. She earned her Ph.D. in Economics from Singapore Management University in 2020. Her research interests include Regional Economics and International Trade. She has her papers published in China Economic Review, Energy Economics, Geophysical Research etc. Dr. LU has received youth fund from National Natural Science Foundation of China (NSFC) and participates in many general program from NSFC and general projects from National Social Science Fund of China (NSSFC).

This paper studies an unexplored rent-seeking phenomenon—the relocation of firms from large cities to small cities for extra subsidies. Using administrative firm-level tax survey data in China, we find that: (1) some high-rank firms (HRFs) relocate to small cities; (2) compared with low-rank firms, HRFs receive higher subsidies; (3) local governments would provide rank-specific subsidies to attract HRFs. We quantify the welfare effects of such rank-dependent rents in a quantitative spatial model. The counterfactual experiments show that appropriate rank-and-place-specific subsidies could alleviate spatial disparities while hurting aggregate welfare and TFP.

For more information of the seminar, scan the following QR code(s) to join Tencent QQ group (904 544 292) or WeChat group named "IAER Seminar (4)", please.

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(QR code is valid until 28/11/2023)