Abstract
This paper explores how China's reform of the urban construction land approval system, which decentralized authority to provincial governments, affects enterprise total factor productivity (TFP) using a quasi-natural experiment approach. The reform streamlined processes, reduced legal ambiguities, and enhanced resource efficiency. Our findings indicate significant TFP gains primarily due to lower administrative costs and improved legal frameworks, emphasizing the pivotal role of regional governance and legal enforcement in economic outcomes. Additionally, the analysis highlights substantial TFP enhancements from reduced inefficient investments and financing constraints, with notable regional and enterprise-specific variations in the impact of legal reform.
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