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The minimum land price (MLP) regulation that China introduced in 2007 provides a quasi-experiment to investigate how government intervention in the land market influences the intensity with which industrial land is used, which has received limited attention in existing literature. Using a difference-in-difference strategy, our estimates show that an exogenous increase in the price of industrial land induced by the MLP regulation’s introduction significantly increased industrial land-use intensity by putting more capital on same amount of land. The findings from this paper therefore suggest that MLP regulation as an incentive-based policy instrument is effective for promoting land-use intensity.

The impact of land price regulation on land-use intensity: evidence from Chinese minimum land price regulation policy