Regulatory enforcement improves urban green land-use efficiency by curbing local protectionism: Evidence from China's shift to emission taxation

The efficient and green use of urban land is essential for achieving sustainable urban development. However, local protectionism often undermines the allocative efficiency of market mechanisms and the implementation of top-down environmental regulations. By treating China's 2018 environmental tax legislation as an exogenous policy shock, we examine how strengthened regulatory enforcement enhances urban green land-use efficiency (UGLUE) by curbing local protectionism. The findings indicate that this policy curtails protection for incumbent firms, forcing them to either upgrade or exit, thereby promoting industrial upgrading. Simultaneously, it restrains protection for new polluting projects, as evidenced by a reduction in land allocation to high-pollution industries. These mechanisms collectively elevate UGLUE by optimizing the use of both existing and newly allocated urban land. Furthermore, the effects of the environmental tax legislation vary with the intensity of local protectionism. By adopting the lens of local protectionism, this research broadens the analytical framework for policy evaluation and provides practical insights for more targeted urban growth management.