Impact of government and industrial agglomeration on industrial land prices: A Taiwanese case study

Government intervention in industrial development is important in promoting national economic development in numerous Asian countries. This study aims to examine the influence of government and industrial agglomeration on industrial land prices by constructing hedonic pricing functions. Based on model testing, this study indicates that variables related to general attributes, locational attributes, industrial agglomeration and government determine land prices. Moreover, industrial agglomeration is positively related to land prices; that is, industrial parks with a stronger agglomeration economy have higher land value. However, the role of government is negatively related to land prices, indicating that government intervention has no influence in increasing land prices and probably results from the inappropriate location of industrial parks and dissatisfaction of those parks' management services. To increase the development efficiency and industry competitiveness, this study proposes that government should identify and improve the weaknesses of industrial parks and promote the establishment of industrial clustering and information transfer among firms.