The role of economic land use efficiency in promoting green industrial development: evidence from China

We use a slacks-based directional distance function to propose a framework for estimating economic land use efficiency, assess its spatial and temporal trends, and evaluate the role of more rational use of land resources in promoting faster transition to greener manufacturing. Our empirical illustration is based on a sample of 281 Chinese cities during the period 2009–2018. Our results suggest that economic land use efficiency has followed an upward trajectory despite experiencing minor fluctuations during the time period considered. We show that efficiency levels are significantly higher in China’s eastern and central regions than in the western areas, although the latter appear to be gradually catching up with their more economically developed counterparts. Land resources in China’s central and western regions perform significantly better when socially unintended outputs are taken into account during estimation. We also demonstrate that more rational land use plays a significant role in promoting faster transition to greener industrial structure and that this effect is mediated by the degree of competition intensity in manufacturing. Finally, our analysis suggest that the green development-enhancing impact of higher land use efficiency is stronger in regions with good local governance capacity, relatively large shares of secondary industry, and limited innovation capacity. Our findings offer valuable insights into possible strategies policymakers can use to promote faster the green transformation of the manufacturing industry.