Uneven Efficiency Penalties of Industrial Land Bias: Evidence from Coastal and Border Cities in China

Industrial land bias is a persistent outcome of China’s land allocation system, but why its efficiency penalty differs across cities remains insufficiently explained. This study examines this unevenness by linking land allocation, population density, and city type heterogeneity within a unified framework. Using panel data for 281 prefecture-level and above cities in China from 2010 to 2022, we combine two-way fixed effects estimation with robustness checks, dynamic panel analysis, transmission channel tests, subsample comparison, and interaction models. Results show that industrial land bias significantly reduces urban land economic efficiency, with the strongest penalty after a one-year lag. Population density is an important spatial transmission channel: industrial land bias lowers density mainly by expanding built-up land faster than population concentration. The penalty is the largest in border cities, smaller in coastal cities, and statistically insignificant in general cities. The negative effect weakens as the secondary industry share increases, suggesting that local production capacity helps absorb industrial land expansion. The contribution of this study is to explain why the same industrial land bias generates uneven efficiency penalties across coastal, general, and border cities, providing evidence for place-sensitive land supply policies.