Does land marketization improve eco-efficiency? Evidence from China
Abstract
The trend of market-oriented land transaction scheme and the optimal allocation of land resources have become two important components of ecological sustainable development. However, the relevance of analyzing effects of land marketization on ecological and environmental development cannot be overemphasized. The ecological and environmental effects of land marketization are the focus of this paper. We begin by developing a theoretical framework to investigate how land marketization affects eco-efficiency. Moreover, we develop a data envelopment analysis model to measure eco-efficiency. We empirically investigate the effect of land marketization on eco-efficiency using a data set of 251 cities in China over the period of 2003 to 2018. Both theoretical and empirical results show that the land marketization exerts positive effects on eco-efficiency. Specifically, a 100% increase in land marketization level leads to a 2.4 percent increase in eco-efficiency. The heterogeneous effects and spatial effects of the land marketization on eco-efficiency are also examined. Besides, the endogeneity issues are also discussed using instrumental variable approach. Finally, the mechanism analysis shows that land marketization improves eco-efficiency primarily through improving efficiency change, best practice change and technology gap change, respectively. The main conclusions are confirmed by several robustness checks.
First published online 30 January 2023
Keyword : land marketization, sustainable development, eco-efficiency, non-convex metafrontier, epsilon-based measure
How to Cite
Yu, Y., & Luo, N. (2023). Does land marketization improve eco-efficiency? Evidence from China. Technological and Economic Development of Economy, 29(2), 539–563. https://doi.org/10.3846/tede.2023.18085
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Tone, K., & Tsutsui, M. (2010). An epsilon-based measure of efficiency in DEA – A third pole of technical efficiency. European Journal of Operational Research, 207(3), 1554–1563. https://doi.org/10.1016/j.ejor.2010.07.014
Vega, S. H., & Elhorst, J. P. (2015). The SLX Model. Journal of Regional Science, 55(3), 339–363. https://doi.org/10.1111/jors.12188
Walheer, B. (2018). Aggregation of metafrontier technology gap ratios: The case of European sectors in 1995–2015. European Journal of Operational Research, 269(3), 1013–1026. https://doi.org/10.1016/j.ejor.2018.02.048
Wang, R., & Tan, R. (2020). Efficiency and distribution of rural construction land marketization in contemporary China. China Economic Review, 60, 101223. https://doi.org/10.1016/j.chieco.2018.09.004
Wu, J., Li, N., & Shi, P. (2014). Benchmark wealth capital stock estimations across China’s 344 prefectures: 1978 to 2012. China Economic Review, 31, 288–302. https://doi.org/10.1016/j.chieco.2014.10.008
Xie, C., & Hu, H. (2020). China’s land resource allocation and urban innovation: Mechanism discussion and empirical evidence. China Industrial Economics, 12, 83–101 (in Chinese).
Yao, W., & Wang, C. (2022). Agricultural land marketization and productivity: Evidence from China. Journal of Applied Economics, 25(1), 22–36. https://doi.org/10.1080/15140326.2021.1997045
Yu, Y., Han, L., Wu, J., Zhao, W., & Zhang, Y. (2022). Green growth effects of high-speed rail in China: The role of industrial transformation. Emerging Markets Finance and Trade, 58(3), 668–680. https://doi.org/10.1080/1540496X.2020.1833856
Yu, Y., & Zhang, N. (2021). Low-carbon city pilot and carbon emission efficiency: Quasi-experimental evidence from China. Energy Economics, 96, 105125. https://doi.org/10.1016/j.eneco.2021.105125
Aladangady, A. (2017). Housing wealth and consumption: Evidence from geographically-linked microdata. American Economic Review, 107(11), 3415–3446. https://doi.org/10.1257/aer.20150491
Andersen, P., & Petersen, N. C. (1993). A procedure for ranking efficient units in data envelopment analysis. Management Science, 39(10), 1261–1264. https://doi.org/10.1287/mnsc.39.10.1261
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173
Battese, G. E., Rao, D. P., & O’Donnell, C. J. (2004). A metafrontier production function for estimation of technical efficiencies and technology gaps for firms operating under different technologies. Journal of Productivity Analysis, 21, 91–103. https://doi.org/10.1023/B:PROD.0000012454.06094.29
Baumol, W. J., & Oates, W. E. (1988). The theory of environmental policy (2nd ed.). Cambridge University Press. https://doi.org/10.1017/CBO9781139173513
Borusyak, K., Hull, P., & Jaravel, X. (2021). Quasi-experimental shift-share research designs. Review of Economic Studies. https://doi.org/10.1093/restud/rdab030
Caliendo, L., & Parro, F. (2015). Estimates of the trade and welfare effects of NAFTA. Review of Economic Studies, 82(1), 1–44. https://doi.org/10.1093/restud/rdu035
Cheng, G. (2014). Data envelopment analysis: Methods and MaxDEA software. Intellectual Property Publishing House Co., Ltd.
Choi, Y., Oh, D. H., & Zhang, N. (2015). Environmentally sensitive productivity growth and its decompositions in China: A metafrontier Malmquist-Luenberger productivity index approach. Empirical Economics, 49(3), 1017–1043. https://doi.org/10.1007/s00181-014-0896-5
Correia, S., Guimarães, P., & Zylkin, T. (2021). Verifying the existence of maximum likelihood estimates for generalized linear models. arXiv:1903.01633. https://arxiv.org/abs/1903.01633v6
Dietz, T., & Rosa, E. A. (1994). Rethinking the environmental impacts of population, affluence and technology. Human Ecology Review, 1(2), 277–300. http://www.jstor.org/stable/24706840
Du, W., & Li, M. (2021). The impact of land resource mismatch and land marketization on pollution emissions of industrial enterprises in China. Journal of Environmental Management, 299, 113565. https://doi.org/10.1016/j.jenvman.2021.113565
Fan, X., Qiu, S., & Sun, Y. (2020). Land finance dependence and urban land marketization in China: The perspective of strategic choice of local governments on land transfer. Land Use Policy, 99, 105023. https://doi.org/10.1016/j.landusepol.2020.105023
Gao, H. (2019). Public land leasing, public productive pending and economic growth in Chinese cities. Land Use Policy, 88, 104076. https://doi.org/10.1016/j.landusepol.2019.104076
Goldsmith-Pinkham, P., Sorkin, I., & Swift, H. (2020). Bartik Instruments: What, when, why, and how. American Economic Review, 110(8), 2586–2624. https://doi.org/10.1257/aer.20181047
Huang, J., Yu, Y., & Ma, C. (2018). Energy efficiency convergence in China: Catch-up, lock-in and regulatory uniformity. Environmental and Resource Economics, 70, 107–130. https://link.springer.com/article/10.1007/s10640-017-0112-0
Jia, R., Fan, M., Shao, S., & Yu, Y. (2021). Urbanization and haze-governance performance: Evidence from China’s 248 cities. Journal of Environmental Management, 288, 112436. https://doi.org/10.1016/j.jenvman.2021.112436
Jiang, R., & Lin, G. C. S. (2021). Placing China’s land marketization: The state, market, and the changing geography of land use in Chinese cities. Land Use Policy, 103, 105293. https://doi.org/10.1016/j.landusepol.2021.105293
Jiang, X., Lu, X., Liu, Q., Chang, C., & Qu, L. (2021). The effects of land transfer marketization on the urban land use efficiency: An empirical study based on 285 cities in China. Ecological Indicators, 132, 108296. https://doi.org/10.1016/j.ecolind.2021.108296
Jin, Q., Kerstens, K., & Van de Woestyne, I. (2020). Metafrontier productivity indices: Questioning the common convexification strategy. European Journal of Operational Research, 283(2), 737–747. https://doi.org/10.1016/j.ejor.2019.11.019
Li, J. (2014). Land sale venue and economic growth path: Evidence from China’s urban land market. Habitat International, 41, 307–313. https://doi.org/10.1016/j.habitatint.2013.10.001
Lin, R., & Liu, X. (2008). Mathematical and empirical research on industrial land in China. Journal of Finance and Economics, 34(7), 51–62 (in Chinese).
Liu, T., Cao, G., Yan, Y., & Wang, R. (2016). Urban land marketization in China: Central policy, local initiative, and market mechanism. Land Use Policy, 57, 265–276. https://doi.org/10.1016/j.landusepol.2016.06.001
Lu, X., Jiang, X., & Gong, M. (2020). How land transfer marketization influence on green total factor productivity from the approach of industrial structure? Evidence from China. Land Use Policy, 95, 104610. https://doi.org/10.1016/j.landusepol.2020.104610
Luo, Y., Lu, Z., Muhammad, S., & Yang, H. (2021). The heterogeneous effects of different technological innovations on eco-efficiency: Evidence from 30 China’s provinces. Ecological Indicators, 127, 107802. https://doi.org/10.1016/j.ecolind.2021.107802
Luo, Y., Lu, Z., Salman, M., & Song, S. (2022). Impacts of heterogenous technological innovations on green productivity: An empirical study from 261 cities in China. Journal of Cleaner Production, 334, 130241. https://doi.org/10.1016/j.jclepro.2021.130241
Oh, D. H., & Lee, J. D. (2010). A metafrontier approach for measuring Malmquist productivity index. Empirical Economics, 38(1), 47–64. https://doi.org/10.1007/s00181-009-0255-0
Ren, S., Li, X., Yuan, B., Li, D., & Chen, X. (2018). The effects of three types of environmental regulation on eco-efficiency: A cross-region analysis in China. Journal of Cleaner Production, 173, 245–255. https://doi.org/10.1016/j.jclepro.2016.08.113
Schmidheiney, S. (1993). Changing course: A global business perspective on development and the environment (Technical Report). MIT Press.
Shao, S., Li, B., Fan, M., & Yang, L. (2021). How does labor transfer affect environmental pollution in rural China? Evidence from a survey. Energy Economics, 102, 105515. https://doi.org/10.1016/j.eneco.2021.105515
Simar, L., & Wilson, P. W. (2007). Estimation and inference in two-stage, semiparametric of production process. Journal of Econometrics, 136(1), 31–64. https://doi.org/10.1016/j.jeconom.2005.07.009
Stern, P. C., Young, O. R., & Druckman, D. (Eds.). (1992). Global environmental change: Understanding the human dimensions. National Academy Press.
Tone, K., & Tsutsui, M. (2010). An epsilon-based measure of efficiency in DEA – A third pole of technical efficiency. European Journal of Operational Research, 207(3), 1554–1563. https://doi.org/10.1016/j.ejor.2010.07.014
Vega, S. H., & Elhorst, J. P. (2015). The SLX Model. Journal of Regional Science, 55(3), 339–363. https://doi.org/10.1111/jors.12188
Walheer, B. (2018). Aggregation of metafrontier technology gap ratios: The case of European sectors in 1995–2015. European Journal of Operational Research, 269(3), 1013–1026. https://doi.org/10.1016/j.ejor.2018.02.048
Wang, R., & Tan, R. (2020). Efficiency and distribution of rural construction land marketization in contemporary China. China Economic Review, 60, 101223. https://doi.org/10.1016/j.chieco.2018.09.004
Wu, J., Li, N., & Shi, P. (2014). Benchmark wealth capital stock estimations across China’s 344 prefectures: 1978 to 2012. China Economic Review, 31, 288–302. https://doi.org/10.1016/j.chieco.2014.10.008
Xie, C., & Hu, H. (2020). China’s land resource allocation and urban innovation: Mechanism discussion and empirical evidence. China Industrial Economics, 12, 83–101 (in Chinese).
Yao, W., & Wang, C. (2022). Agricultural land marketization and productivity: Evidence from China. Journal of Applied Economics, 25(1), 22–36. https://doi.org/10.1080/15140326.2021.1997045
Yu, Y., Han, L., Wu, J., Zhao, W., & Zhang, Y. (2022). Green growth effects of high-speed rail in China: The role of industrial transformation. Emerging Markets Finance and Trade, 58(3), 668–680. https://doi.org/10.1080/1540496X.2020.1833856
Yu, Y., & Zhang, N. (2021). Low-carbon city pilot and carbon emission efficiency: Quasi-experimental evidence from China. Energy Economics, 96, 105125. https://doi.org/10.1016/j.eneco.2021.105125