Impacts of the political incentive for environmental protection on industrial land supply: Evidence from the cadre evaluation system reform in China

Abstract

This paper investigates the implications of the political incentive system reform for industrial land supply. We study the stronger political incentive for environmental protection in China that resulted from the Cadre Evaluation System (CES) reform in 2013. Using the interaction of municipalities' pre-CES environmental quality with the introduction of CES reform, we document dirty cities experience a significantly larger decline in industrial land supply following the reform. Also, the reform may have a larger impact on dirtier industries and wealthier cities, and our baseline results are mainly driven by the local leaders who are more likely to be promoted.