Can liberalizing rural construction land mitigate industrial land price distortion of China? An institutional logics perspective

Guangyu Cheng, Wenwen Zhang and Kwong Wing Chau

Land Use Policy, 2025, vol. 157, issue C

Abstract: China's local governments widely suppress industrial land prices. They follow a state-dominated logic in industrial land transfers, prioritizing promoting jurisdictional economies over obtaining immediate land returns. Drawing on the institutional logics perspective, this study explores whether the liberalization reform on rural construction land can be the potential solution to mitigating industrial land price distortion led by government interventions. This reform allows rural collectives to engage in industrial land supply, reducing governments' monopoly and shifting their attentional focus from economic stimulation to market efficiency. Using the Difference-in-Differences method, we analyze industrial land transaction records from 255 county-level units in the Yangtze River Delta between 2012 and 2019. Research findings show that pilot counties implementing the reform experience a 6.9 % increase in industrial land prices compared to non-pilot ones. This price increase reflects a shift in local governments’ industrial land transfer strategies toward a more market-oriented logic. Further analysis shows that the positive effects are more pronounced in counties and county-level cities than in districts, as well as in economically developed areas compared to less developed ones. This study sheds new lights on the policy effects of liberalization land reforms in transition economies, interpreted through the institutional logics perspective.

Keywords: Liberalization reform; Industrial land; Institutional logics; Price distortions; Attentional focus; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:157:y:2025:i:c:s0264837725002273

DOI: 10.1016/j.landusepol.2025.107693

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