Essays in Urban Economics: Agglomeration Economies in the Manufacturing Sector and Land Constraints in Housing Markets

This dissertation focuses on the study of urban development. The first chapter explores whether agglomerative forces can explain the location decisions of new manufacturing firms in the face of declining manufacturing activity in the United States over the time period 2004-2011. I find that labor market pooling and input-output linkages have the largest effects, positively influencing firm location. Moreover, corporate taxes discourage firm activity but the effects are weaker in more geographically concentrated industries. I then investigate whether negative macro shocks would change how firm location decisions respond to agglomeration forces. The results indicate that the workings of agglomeration economies have become more pronounced after the Great Recession. New firms may become more risk averse after large negative shocks and that become more likely to choose the place where industry relations are strong. The second chapter examines the influence of land supply on housing markets in urban China. The extent to which geographical and man-made land constraints influence housing prices and quantities is explored. Using a sample of 35 cities in China from 2003 to 2012, I find that cities with less naturally available land have experienced greater price appreciation and the quantity response is less in those places. The results imply that geography matters in Chinese housing markets where land is discretely allocated by the government. In cities where there is more land naturally available, the government may be less concerned about the loss of arable land and be more permissive with development. Moreover, my findings imply that the allocation of land use via government decision in China is quasi-exogenous to changes in housing price and quantity, suggesting that decisions by governments about land supply may not be dependent on housing prices.Economics, Department o