How Does Land Misallocation Weaken Economic Resilience? Evidence from China

Drawing on evidence from China's land market, this study systematically investigates the impact of land misallocation on economic resilience and reveals the underlying mechanism that operates by suppressing technological advancement. A theoretical model of economic resilience is developed, incorporating technology and factor allocation. Empirical analysis is conducted using a panel dataset of 95 Chinese cities (2011-2024) through spatial econometric and mediation models. The findings indicate that land misallocation significantly reduces local economic resilience and exhibits negative spatial spillover effects. The core mechanism is identified as follows: subsidies via low-priced industrial land delay the market exit of low-efficiency firms, hindering the reallocation of production factors to more productive sectors. This suppression of technological progress ultimately weakens a region's capacity to withstand external shocks. Based on the findings, policy implications include optimizing land supply structure, accelerating fiscal system reform, and strengthening policy coordination.