Fiscal Decentralization and Industrial Land Transfer Prices

This study empirically examined the impact of local governments' fiscal incentives on industrial land transfer prices using the province‐managing‐county fiscal reform as a quasi‐natural experiment. A difference‐in‐differences design was applied to land parcel transaction data from 2007 to 2019 to identify the effect of fiscal decentralization reform on land prices. The results indicate that the reform increased industrial land transfer prices significantly. Mechanism analysis shows that the reform reduced local governments' fiscal incentives, lowered local tax effort, and promoted industrial structure optimization in reformed counties, thereby decreasing county governments' reliance on land‐based investment promotion. The effect was stronger for pollution‐intensive industries and existing construction land .