The impact of land finance on urban land use efficiency: A panel threshold model for Chinese provinces

Abstract

AbstractThe improvement of urban land use efficiency has become the main goal for developing countries in response to rapid urbanization. This paper explores the impact of land finance on urban land use efficiency (ULUE) on the provincial level using land conveyance fee and land‐related tax data from China between 2004 and 2016. First, a super‐efficiency data envelopment analysis model was applied to measure ULUE. The results showed that ULUE was highest in eastern China, followed by central China, and ULUE was lowest in western China. Then, a provincial panel threshold model was built for an empirical analysis. In particular, a double threshold was identified in the relationship between the land conveyance fee and ULUE. A significant positive effect on ULUE was found when the percentage of the new construction land supply quantity remained below 0.401. However, this effect became negative when the percentage of threshold variables exceeded 0.842. Moreover, land‐related tax was found to exert significant negative effects on ULUE when the percentage of the new construction land supply quantity remained below 0.842. Insignificant positive effects were found when the percentage exceeded this level. The empirical results suggested that the relationship between land finance and ULUE is nonlinear; excessive land finance will negatively impact ULUE.