Can urban land market reform mitigate industrial emissions? Environmental evidence from 257 prefecture-level cities in China

Abstract

In the period of planned economy, China used low-cost land investment to drive economic development for a long time, which brought problems such as low efficient use of natural resources and environmental pollution. Under the dual pressure of economic development and environmental protection, Chinese government has begun to implement the urban land market reform, hoping to gradually change the extensive economic development model with high input and low output through the market mechanism. In order to investigate whether the urban land market reform can reduce industrial emissions and promote the transformation of socioeconomic, this paper constructs industrial land transactions and socioeconomic panel data of 257 prefecture-level cities in China from 2007 to 2020. The research results show that (1) The urban land market reform has reduced industrial emissions through changing the behavior of local governments in fiscal decentralization and the behavior of industrial enterprises. (2) The regional competition and cooperation brought by urban land market reform have regional heterogeneity in the emission reduction effect of industrial emissions. (3) The emission reduction effect of urban land market reform has a spatial spillover effect, which not only affects the local area, but also affects neighboring cities. We suggest that Chinese government needs to continue to carry out ULMR and increase scientific investment and technological innovation, promote the transformation of the industrial economy, and promote healthy competition among local governments. The findings not only provide valuable insights for the future reform of China's market economy, but also provide practical reference for social changes for other countries in the transition period of the world.