Research on the Impact of County-to-District Reform on Industrial Land Factor Misallocation

Abstract

As an important policy instrument for promoting regional integration, county-to-district reform plays a significant role in advancing coordinated regional development and optimizing the market-based allocation of factors. Using a balanced panel of 278 Chinese prefecture-level cities from 2011 to 2022, this study treats county-to-district reform as a quasi-natural experiment and employs a staggered difference-in-differences (DID) model to identify its effect on industrial land-factor misallocation. Industrial land-factor misallocation is measured by the deviation between the marginal product of industrial land and its market price, and mechanism tests are conducted to examine the roles of economic agglomeration, industrial agglomeration, and innovative talent agglomeration. This study finds that county-to-district reform alleviates industrial land factor misallocation, and this conclusion remains robust after a series of robustness checks. Mechanism tests show that the reform promotes economic agglomeration, industrial agglomeration, and innovative talent agglomeration, thereby improving industrial land allocation. Heterogeneity analysis reveals that the mitigating effect of county-to-district reform on industrial land factor misallocation varies across cities with different characteristics. Further analysis shows that the reform increases industrial land transfer revenue and prices and improves the structure of land supply. This study deepens the understanding of the relationship between administrative restructuring and land-factor allocation and provides policy implications for improving industrial land allocation through institutional reform.