Reducing Efficiency Loss Caused by Land Investment Introduction Based on Factor-Biased Technological Progress

Ning Zhang and Linyun Zhou ()
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Ning Zhang: College of Public Administration, Nanjing Agricultural University, Nanjing 210095, China
Linyun Zhou: School of Emergency Management, Nanjing University of Science and Technology, Nanjing 210095, China

Land, 2025, vol. 14, issue 7, 1-22

Abstract: In this study, we explore the impact of land investment introduction on efficiency loss at both the enterprise and urban levels and discuss the role of factor-biased technological progress in minimizing these losses. Using a nested constant elasticity of substitution (CES) production function, we theoretically validate the premise that land investment introduction disrupts the optimal allocation of productive factors and reduces the “threshold selection” effect of land cost, leading to efficiency losses. Empirically, the systematic generalized method of moments (GMM) is applied to analyze panel data from 284 prefecture-level cities in China between 2007 and 2019. The findings reveal that land investment introduction brings about efficiency losses and prolonged land investment strategies that deepen enterprise efficiency loss, while urban efficiency loss may be temporarily alleviated but tends to deepen over the long term. Enterprise efficiency loss can be reduced by selecting land-biased, labor-biased, and capital-biased technological progress; however, its impact on urban efficiency loss remains uncertain. These findings provide insights into the optimal selection of factor-biased technological progress for industrial enterprises and provide policy-oriented recommendations for enhancing production and improving efficiency.

Keywords: land investment introduction; enterprise TFP; city TFP; factor-biased technological progress (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2025
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