The Effects of Inefficient Land Redevelopment Policies on Tax Revenue per Unit of Land and Resource Allocation Efficiency

This paper examines how existing institutional measures can eliminate land price distortions arising from the practice of using land to attract investment. Drawing on the 2014 pilot policy for inefficient land redevelopment, it identifies the policy's effects on tax contributions per unit of land and resource allocation efficiency. First, the policy effectively curbs government land subsidies, corrects firms' excessive land acquisition and distortions in their investment structure, and increases their tax contributions. Second, it prompts firms to return to normal operating patterns, facilitating factor agglomeration and improving growth capacity and total factor productivity. Finally, the policy reduces the degree of resource misallocation among firms in treatment-group cities by 34.84%, significantly improving market efficiency.