Industrial Path Dependence and Water Resource Externality: A Comparative Study of Tuhua Village and Xiaozhou Village in Guangzhou, China
DOI:
https://doi.org/10.64229/pjaade58Keywords:
Economics, Environmental economics, Industrial path dependence, Water resource externality, Urban village transformationAbstract
This study examines how industrial path dependence generates spatial water resource externalities between neighboring peri-urban villages. While existing scholarship has documented the economic dynamism of village-town industrialization and the environmental costs of cultural tourism, the spatial spillover of industrial pollution along shared waterways between adjacent villages remains underexplored. Using Tuhua Village (textile manufacturing) and Xiaozhou Village (cultural tourism and creative industries) in Haizhu District of Guangzhou as a comparative case study, this study employs semi-structured interviews with seven stakeholder types, archival analysis, and physical-chemical water quality tests across three monitoring sections. Fieldwork was conducted in February 2026. The findings reveal that path-dependent industrial divergence transformed shared water resources into pollution carriers in Tuhua and ecological assets in Xiaozhou, producing classic negative externalities due to incomplete water property rights. Current water quality data confirm that governance interventions__wastewater treatment infrastructure, pollution fees, and factory closures__have successfully contained industrial tracer pollutants (LAS, formaldehyde), though residual BOD₅ elevation indicates ongoing domestic pollution from both villages. The study demonstrates that while end-of-pipe regulation can internalize industrial pollution costs, equitable watershed outcomes require complementary cross-village ecological compensation mechanisms.
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