Land-Use Regulation and Regional Economic Performance: Evidence from County-Level Data in China

Against the macro-background of balancing development and food security strategies, China has implemented a land-use regulation system centered on farmland protection. However, the economic impacts of such regulation lack sufficient quantitative evaluation. Using farmland retention targets at the county-level in the administrative region and combining them with relevant data, this study employs an Intensity Difference-in-Differences (Intensity DID) approach to examine how land-use regulation affects county-level economic growth and convergence. The findings reveal a U-shaped relationship between land-use regulation and county-level economic growth, suggesting that, at the current stage, the intensity of land-use regulation generally promotes economic growth. Heterogeneity analysis further indicates that county economies in major grain production areas (MGPAs) and main grain-producing counties (MGPCs) experience stronger negative constraints related to the policy, while MGPCs in non-major grain production areas (non-MGPAs) are most sensitive to land-use regulation. China’s county economies exhibit convergence; however, land-use regulation may reduce the growth rate of counties that were underdeveloped in the base period, thereby widening inter-county development disparities. This divergence is manifested in the lack of convergence between the clubs of MGPCs and non-MGPCs. Mechanism analysis suggests that differences in industrial structure, capital investment, and fiscal expenditure constitute the key focal points for addressing the issue. Policy implications indicate that China should strengthen land-use regulation on the premise of rationally determining the functions and scale of various land types, continue to advance market-oriented reforms of land factors, improve the vertical and horizontal interest compensation mechanism for MGPAs, and stimulate the endogenous development momentum of these regions.