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简介：
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Land allocation plays an essential role in China’s industrial development. In the past, most industrial land was transacted through negotiations that usually lacked transparency and competition. Since 2007, the central government has imposed public auction for transactions of industrial land. This paper investigates whether the 2007 auction reform has improved industrial land allocation efficiency by focusing on the allocation of local land to different industries. We develop a theoretical framework to understand the land allocation mechanisms before and after the reform. Utilizing three comprehensive data sets of new industrial establishments, land transactions and nighttime lights, the empirical analysis finds that, in sharp contrast to the pre-reform period, more land was allocated to industries with local comparative advantage during the post-reform period, and this effect is more pronounced in the localities with higher reform stringency levels. It suggests that the reform has promoted the spatial clustering of firms from industries which have close connections to each other and hence facilitated the formation of a more efficient local industrial composition. It also finds suggestive evidence that the reform has a positive effect on local output, consistent with the theory. |
