Hometown favoritism and land allocation: Evidence from China

We study the cause and consequences of hometown favoritism in industrial land supply, based on the dataset of Chinese land transaction and the birthplaces of Central Committee (CC) members. We find that prefecture cities have more industrial land supply when they are the hometowns of current CC members. Compared to prefecture with no CC members, prefecture with CC members has 214.05 ha more industrial land supply. Having an additional CC member in a prefecture increases the industrial land supply by 5.5 %. We find that political career concern, social ties and culture link drive hometown favoritism. Furthermore, hometown favoritism in industrial land supply can distort the location and structure of industrial land supply, and distort the efficiency of economic development.