China's Urban Land Reform, Urban Productivity, and Local Government Behavior

Abstract

Based on provincial land leasing data, this paper estimates the impact of urban land reform on urban productivity in China and analyzes factors affecting local government behavior in land reform. More specifically, it examines the relationship between urban productivity and: (a) the ratio of administrative land allocation to leasing, and (b) the choice of auction and tender among leasing methods. The paper documents differences in ratios of land leasing vis-à-vis administrative allocation depending on the percentage of industrial output by state-owned enterprises and the regional density of cities. Overall, the findings point to efficiency gains from adopting public land leasing and the importance of local context and political economy in understanding local government in China. Journal of Economic Literature, Classification Numbers: E23, O18, R52. 1 figure, 4 tables, 36 references.