Urban administrative hierarchy and urban land use efficiency: Evidence from Chinese cities

The allocation of administrative resources is of vital importance, especially when discussing the process of urbanization in China. Under the unique political and administrative systems found in China, it is the urban administrative hierarchy (UAH) that determines both the agglomeration model and the allocation process of urban resources. Based on the panel data of 281 cities in China from 2003 to 2017, a dynamic spatial panel model (DSPM) and a mediation effect model are used to investigate the effect of the UAH on urban land use efficiency (ULUE), both from a theoretical and empirical point of view. The study finds not only the higher the administrative level, the higher the ULUE, but also that improvements to the UAH can significantly improve ULUE. After considering a series of robustness tests, the research conclusion is held to be valid. This paper also finds that both public services and investment environment have significant mediation effects with respect to the UAH and ULUE, but financial subsidies and infrastructure have significant suppressing effects. The paper promotes the understanding of ULUE and reveals the economic significance of the administrative hierarchy in resource allocation in a more general sense.