How Land Use Regulation Affects County Governments’ Land Transfers and Public Service Provision

As a populous country with limited per capita land area, China has implemented the strictest land use regulation to ensure food security. Yet quantitative assessments of how it shapes land use change and the subsequent economic impacts remain insufficient. Land use directly affects land supply for industry and services, thereby impacting local fiscal and tax revenues. Meanwhile, land transfer income serves as a major off-budget revenue source for local governments, with county fiscal capacity laying the foundation for national economic development and public welfare. Therefore, this study integrates county-level statistics with remotely sensed land use data and applies an Intensity Difference-in-Differences (Intensity DID) design to identify policy impacts. Specifically, it examines the effects of land use regulation on county governments’ land transfer activities, land use efficiency, as well as fiscal revenue and public service provision. Empirical results show that tighter land use regulation constrains the new supply of construction land by limiting cultivated land conversion. In response, local governments modify floor area ratios (FARs) and shorten construction cycles, which is conducive to improving land use efficiency. Nevertheless, the policy reduces the land transfer income, tax revenue, and general public budget revenue of county governments, weakening public service provision. Heterogeneity analysis indicates that major grain-producing counties are more severely affected by negative policy shocks than non-major ones. This study provides empirical evidence for optimizing the land use regulation system and offers policy implications for coordinating food security and balanced regional development through horizontal interest compensation in major grain-producing regions.