The Impact of the Regional Differentiation of Land Supply on Total Factor Productivity in China: From the Perspective of Total Factor Productivity Decomposition

Abstract

Increasing total factor productivity is the key to promoting high-quality economic development. This paper starts with land supply as an institutional source factor and discusses the impact of the regional differentiation of land supply on total factor productivity in China. Based on the panel data of 273 cities in China from 2003 to 2017, this paper measures total factor productivity (TFP) using the DEA-Malmquist index, decomposes it into technical progress (TE), pure technical efficiency (PE) and scale efficiency (SE), and analyzes the effect of the regional differentiation of land supply on TFP using the spatial Durbin model and mediating model. This study finds the following: (1) At the national level, the tilting of land supply to the central and western regions leads to a contradiction between land supply and demand, which hinders TFP by suppressing TE, PE and SE. (2) At the regional level, the reduction in land supply in the eastern region expands the technological substitution rate, induces the substitution effect of enterprise innovation, and thus promotes TE, but inhibits PE and SE under the resource constraint and congestion effect, which hinders the improvement of TFP. The estimates for the central and western regions are generally consistent with the national results; again, as land supply increases, this hinders TFP by suppressing TE, PE and SE. (3) In terms of the mechanism of influence, the decrease in land supply in the eastern region promotes TE and TFP by promoting urban innovation and inhibiting SE through productive services agglomeration; the increase in land supply in the central and western regions hinders TE and TFP by inhibiting urban innovation, and hinders SE through manufacturing agglomeration. The conclusion of this paper has great significance for deepening the structural reform of land supply and promoting high-quality economic development.