Study on the Distortionary Effects of Water Resources Allocation in the Yangtze River Economic Belt, China

Jinping Tong, Jiawen Cao, Teng Qin, Guodong Qin and Jianfeng Ma ()
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Jinping Tong: School of Business, Changzhou University, Changzhou 213159, China
Jiawen Cao: School of Business, Changzhou University, Changzhou 213159, China
Teng Qin: School of Business, Changzhou University, Changzhou 213159, China
Guodong Qin: School of Business, Changzhou University, Changzhou 213159, China
Jianfeng Ma: School of Business, Changzhou University, Changzhou 213159, China

Sustainability, 2025, vol. 17, issue 4, 1-22

Abstract: As one of the most dynamic natural elements, water resources play a vital role in both ecological and economic activities. The rational allocation of water resources is essential for the sustainable development of human society. Using data from prefecture-level cities in the Yangtze River Economic Belt from 2013 to 2022, this study employs the Cobb–Douglas (C-D) production function to measure the degree of water resource allocation distortion across provinces and cities. Additionally, a panel data model is applied to analyze the influencing factors. The key findings are as follows: The issue of excessive water resource allocation is widespread in the Yangtze River Economic Belt, with the highest degree of distortion observed in the middle reaches, where the average distortion index reaches 1.43—significantly higher than that in the upstream (1.15) and downstream (1.20) regions. Water resource endowment, the South-to-North Water Diversion Project, and rising water prices contribute significantly to improving water resource allocation, whereas increased industrial water use efficiency and excessive government intervention exacerbate allocation distortions. Regionally, the influencing factors exhibit broadly similar effects across provinces. In sectoral analysis, only the estimated coefficients of water resource policies show directional differences, whereas other factors have no significant impact on allocation distortion. By identifying the extent and causes of water resource misallocation, this study provides empirical evidence to support region-specific water management strategies, aiming to enhance resource efficiency and promote sustainable development.

Keywords: water allocation; resource allocation distortions; influencing factors (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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