Impact of the government’s environmental attention on industrial land transactions of polluting enterprises

As awareness of environmental protection increases, governments worldwide, especially those in developing countries, become increasingly concerned with environmental issues and focus on pursuing economic development while maintaining ecological balance. Focusing on China, the largest developing country in the world, this study systematically investigates the effects and internal mechanisms of governments’ environmental attention to industrial land transactions of polluting enterprises. This study demonstrates that when governments focus more on the environment, the likelihood and area of transactions involving polluting firms’ industrial land decrease. The results of a robustness analysis, an endogeneity analysis, and a placebo test support the above conclusions. A discussion of internal mechanisms shows that local governments’ environmental attention inhibits industrial land transactions of polluting enterprises by increasing production costs and crowding out available funds. Additionally, when governments pay attention to the environment, some polluting enterprises move closer to administrative boundaries or are directly located in districts and counties at such boundaries, which leads to the trans-regional transfer of pollution. This study elucidates the procedure for allocating land resources under the constraints of the ecological environment and provides a scientific foundation for policy decisions by governments worldwide.