Industrial land transfer and enterprise pollution emissions: Evidence from China

Abstract

This study explores how large-scale and low-price industrial land transfer by local governments affects industrial enterprises’ pollution emissions in China. While many studies have examined industrial land transfer's implications for the macroeconomic outcomes, little attention has been paid to its impacts on industrial enterprises’ pollution emissions. Using data on China's city-level industrial land and enterprises from 2007 to 2014, we find that the large-scale and low-price industrial land transfer significantly increases industrial pollutant emissions. Cities with a larger scale of industrial land transfer experience higher total and per capita industrial enterprise emissions. Moreover, this effect is mainly observed in the central and western regions because of differences in institutional quality. Further analysis suggests that land resource misallocation and land law violations are the mechanisms through which industrial land transfer exacerbates environmental pollution. The findings imply that breaking the monopoly of land transfer by local governments can help reduce environmental pollution.