IDEAS home Printed from https://ideas.repec.org/a/eee/lauspo/v119y2022ics0264837722001879.html
   My bibliography  Save this article

How the institutional change in urban redevelopment affects the duration of land redevelopment approval in China?

Author

Listed:
  • Chen, Yang
  • Zhang, Xiaoling
  • Chau, K.W.
  • Yang, Linchuan

Abstract

Urban redevelopment is a crucial prescription in response to the problems associated with limited land, urban decay, and fading buildings, especially for China’s megacities. Given that state-dominated urban redevelopment is slow and limited, the Chinese government has proposed a pioneering market-oriented approach to drive urban redevelopment in Shenzhen. This study seeks to examine the impacts of market-oriented institutional arrangements on land redevelopment approval duration (LRAD) in China from the perspective of public and private interests. Various institutional arrangements are observed under the institutional change of urban redevelopment in Shenzhen, and they are differed by the nature of the applicants, including the original property owners (old factory owner (OFO)), their representatives (e.g., village committees (VC) and the government agency involved in redevelopment (URB)), and developers (DP, second-hand property owner). A number of hypotheses are developed, and empirical tests are conducted to verify or dismiss our hypotheses with the data in Shenzhen. The empirical findings indicate that (1) The LRAD is the shortest when the applicant is the OFO and the longest if the applicant is the local government officials such as URB. (2) Compared with the URB, the LRAD is shorter if the VC is the applicant. (3) The LRAD is longer for the projects with a larger redevelopment scale and the projects with more dedicated public facilities. The findings shed new insights into the design and practical effects of market-oriented institutional arrangements on the progress performance of urban redevelopment, which can give the local government a timely reminder that they should examine and approve urban redevelopment schemes in a soundly planned and socially sustainable fashion.

Suggested Citation

  • Chen, Yang & Zhang, Xiaoling & Chau, K.W. & Yang, Linchuan, 2022. "How the institutional change in urban redevelopment affects the duration of land redevelopment approval in China?," Land Use Policy, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:lauspo:v:119:y:2022:i:c:s0264837722001879
    DOI: 10.1016/j.landusepol.2022.106160
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264837722001879
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.landusepol.2022.106160?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bulan, Laarni & Mayer, Christopher & Somerville, C. Tsuriel, 2009. "Irreversible investment, real options, and competition: Evidence from real estate development," Journal of Urban Economics, Elsevier, vol. 65(3), pages 237-251, May.
    2. Eggertsson, Thrainn, 1990. "The role of transaction costs and property rights in economic analysis," European Economic Review, Elsevier, vol. 34(2-3), pages 450-457, May.
    3. McCann, Laura & Colby, Bonnie & Easter, K. William & Kasterine, Alexander & Kuperan, K.V., 2005. "Transaction cost measurement for evaluating environmental policies," Ecological Economics, Elsevier, vol. 52(4), pages 527-542, March.
    4. Dahlman, Carl J, 1979. "The Problem of Externality," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 141-162, April.
    5. Joseph T. Mahoney & Anita M. McGahan & Christos N. Pitelis, 2009. "Perspective ---The Interdependence of Private and Public Interests," Organization Science, INFORMS, vol. 20(6), pages 1034-1052, December.
    6. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    7. Sheridan Titman & Arthur Warga, 1986. "Risk and the Performance of Real Estate Investment Trusts: A Multiple Index Approach," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 14(3), pages 414-431, September.
    8. Williams, Joseph T, 1991. "Real Estate Development as an Option," The Journal of Real Estate Finance and Economics, Springer, vol. 4(2), pages 191-208, June.
    9. Erfani, Goran & Roe, Maggie, 2020. "Institutional stakeholder participation in urban redevelopment in Tehran: An evaluation of decisions and actions," Land Use Policy, Elsevier, vol. 91(C).
    10. Pavlos Loizou & Nick French, 2012. "Risk and uncertainty in development," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 30(2), pages 198-210, March.
    11. K. Chau & S. Wong, 2014. "Externalities of Urban Renewal: A Real Option Perspective," The Journal of Real Estate Finance and Economics, Springer, vol. 48(3), pages 546-560, April.
    12. I-Cheng Yeh & Che-Hui Lien, 2020. "Evaluating real estate development project with Monte Carlo based binomial options pricing model," Applied Economics Letters, Taylor & Francis Journals, vol. 27(4), pages 307-324, February.
    13. Madadi, M. & Iranmanesh, H., 2012. "A management oriented approach to reduce a project duration and its risk (variability)," European Journal of Operational Research, Elsevier, vol. 219(3), pages 751-761.
    14. Lai, Yani & Wang, Jiayuan & Lok, Waiming, 2017. "Redefining property rights over collective land in the urban redevelopment of Shenzhen, China," Land Use Policy, Elsevier, vol. 69(C), pages 485-493.
    15. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    16. Robert Grovenstein & James Kau & Henry Munneke, 2011. "Development Value: A Real Options Approach Using Empirical Data," The Journal of Real Estate Finance and Economics, Springer, vol. 43(3), pages 321-335, October.
    17. Lai, Yani & Tang, Bosin & Chen, Xiangsheng & Zheng, Xian, 2021. "Spatial determinants of land redevelopment in the urban renewal processes in Shenzhen, China," Land Use Policy, Elsevier, vol. 103(C).
    18. Lin Zhang & Yanliu Lin & Pieter Hooimeijer & Stan Geertman, 2020. "Heterogeneity of public participation in urban redevelopment in Chinese cities: Beijing versus Guangzhou," Urban Studies, Urban Studies Journal Limited, vol. 57(9), pages 1903-1919, July.
    19. Nashwan Dawood, 1998. "Estimating project and activity duration: a risk management approach using network analysis," Construction Management and Economics, Taylor & Francis Journals, vol. 16(1), pages 41-48.
    20. Dinghuan Yuan & Yung Yau & Huiying (Cynthia) Hou & Yongshen Liu, 2021. "Factors Influencing the Project Duration of Urban Village Redevelopment in Contemporary China," Land, MDPI, vol. 10(7), pages 1-24, July.
    21. Daniel W. Bromley, 1989. "Institutional Change and Economic Efficiency," Journal of Economic Issues, Taylor & Francis Journals, vol. 23(3), pages 735-759, September.
    22. Yang, Linchuan & Chu, Xiaoling & Gou, Zhonghua & Yang, Hongtai & Lu, Yi & Huang, Wencheng, 2020. "Accessibility and proximity effects of bus rapid transit on housing prices: Heterogeneity across price quantiles and space," Journal of Transport Geography, Elsevier, vol. 88(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaodong Zhang & Kaifeng Duan & Lun Yang & Xiaokun Wei, 2024. "Land Regulation and Local Service Provision: Can Economic Growth and Environmental Protection Be Achieved Simultaneously?," Land, MDPI, vol. 13(9), pages 1-23, September.
    2. Dinghuan Yuan & Jiaxin Li & Qiuxiang Li & Yang Fu, 2024. "Tripartite Evolutionary Game and Policy Simulation: Strategic Governance in the Redevelopment of the Urban Village in Guangzhou," Land, MDPI, vol. 13(11), pages 1-21, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrianos Tsekrekos & George Kanoutos, 2013. "Real Options Premia Implied from Recent Transactions in the Greek Real Estate Market," The Journal of Real Estate Finance and Economics, Springer, vol. 47(1), pages 152-168, July.
    2. Thiel, Andreas & Schleyer, Christian & Hinkel, Jochen & Schlüter, Maja & Hagedorn, Konrad & Bisaro, Sandy & Bobojonov, Ihtiyor & Hamidov, Ahmad, 2016. "Transferring Williamson's discriminating alignment to the analysis of environmental governance of social-ecological interdependence," Ecological Economics, Elsevier, vol. 128(C), pages 159-168.
    3. Lu, Chien-Lin & Liao, Wen-Chi & Peng, Chien-Wen, 2020. "Developers’ perspectives on timing to build: Evidence from microdata of land acquisition and development," Journal of Housing Economics, Elsevier, vol. 49(C).
    4. L. Li & Helen X. H. Bao & K. W. Chau, 2023. "On the Strategic Timing of Sales by Real Estate Developers: To Wait or To Presell?," The Journal of Real Estate Finance and Economics, Springer, vol. 66(1), pages 169-196, January.
    5. Christophe Depres & Gilles Grolleau & Naoufel Mzoughi, 2008. "Contracting for Environmental Property Rights: The Case of Vittel," Economica, London School of Economics and Political Science, vol. 75(299), pages 412-434, August.
    6. Gang‐Zhi Fan & Ming Pu & Tien Foo Sing & Xiaoyu Zhang, 2022. "Risk aversion and urban land development options," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(3), pages 767-788, September.
    7. Coggan, Anthea & Whitten, Stuart M. & Bennett, Jeff, 2010. "Influences of transaction costs in environmental policy," Ecological Economics, Elsevier, vol. 69(9), pages 1777-1784, July.
    8. Nantongo, Mary & Vatn, Arild, 2019. "Estimating Transaction Costs of REDD+," Ecological Economics, Elsevier, vol. 156(C), pages 1-11.
    9. Shi, Song & Yang, Zan & Tripe, David & Zhang, Huan, 2015. "Uncertainty and new apartment price setting: A real options approach," Pacific-Basin Finance Journal, Elsevier, vol. 35(PB), pages 574-591.
    10. Cheng, Hui & Lai, Yani & De Tong,, 2021. "Decoding the decision-making in the new wave of urban redevelopment in China: A case study of a bottom-up industrial land redevelopment in Shenzhen," Land Use Policy, Elsevier, vol. 111(C).
    11. John Clapp & Piet Eichholtz & Thies Lindenthal, 2012. "Real Option Value over a Housing Market Cycle: West Berlin," ERSA conference papers ersa12p264, European Regional Science Association.
    12. Claude Ménard & Mary M. Shirley, 2010. "The Contribution of Douglass North to New Institutional Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00654327, HAL.
    13. Anderson White, T. & Ford Runge, C., 1995. "The emergence and evolution of collective action: Lessons from watershed management in Haiti," World Development, Elsevier, vol. 23(10), pages 1683-1698, October.
    14. Renigier-Biłozor Małgorzata & d’Amato Maurizio, 2017. "The Valuation of Hope Value for Real Estate Development," Real Estate Management and Valuation, Sciendo, vol. 25(2), pages 91-101, June.
    15. Christine Léger Léger-Bosch, 2019. "Farmland tenure and transaction costs: Public and collectively owned land vs conventional coordination mechanisms in France [Régime de tenure foncière et coûts de transaction: terres publiques et c," Post-Print hal-02573765, HAL.
    16. Phan, Thu-Ha Dang & Brouwer, Roy & Davidson, Marc David, 2017. "A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects," Ecological Economics, Elsevier, vol. 133(C), pages 1-10.
    17. Foundjem-Tita, Divine & Speelman, Stijn & D'Haese, Marijke & Degrande, Ann & Van Huylenbroeck, Guido & Van Damme, Patrick & Tchoundjeu, Zac, 2014. "A tale of transaction costs and forest law compliance: Trade permits for Non Timber Forests Products in Cameroon," Forest Policy and Economics, Elsevier, vol. 38(C), pages 132-142.
    18. Bellanger, Manuel & Fonner, Robert & Holland, Daniel S. & Libecap, Gary D. & Lipton, Douglas W. & Scemama, Pierre & Speir, Cameron & Thébaud, Olivier, 2021. "Cross-sectoral externalities related to natural resources and ecosystem services," Ecological Economics, Elsevier, vol. 184(C).
    19. Coggan, Anthea & Buitelaar, Edwin & Whitten, Stuart & Bennett, Jeff, 2013. "Factors that influence transaction costs in development offsets: Who bears what and why?," Ecological Economics, Elsevier, vol. 88(C), pages 222-231.
    20. Christine Léger Léger-Bosch, 2018. "Farmland Tenure and Transaction Costs," Working Papers hal-01775201, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:lauspo:v:119:y:2022:i:c:s0264837722001879. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joice Jiang (email available below). General contact details of provider: https://www.journals.elsevier.com/land-use-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.