Decentralization of land development approval and economic impacts: A study on China's urban construction land reform

Xin Jiang and Jinhua Xu

Finance Research Letters, 2024, vol. 69, issue PB

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.

Keywords: Land reform; Land development approval; Total factor productivity; China; Decentralization (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012534

DOI: 10.1016/j.frl.2024.106224

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