The Impact of Government Digital Transformation on Land Use Efficiency: Evidence from China

Abstract

Digital transformation has become a prominent trend in both the private and public sectors. Different from studies focusing on the transformation of the private sector, this study aims to investigate the impact of public sector digitalization, i.e., government digital transformation (GDT), on land use efficiency (LUE). Utilizing the introduction of the Big Data Bureau (BDB) as a quasi-natural experiment to GDT, this study employs a staggered difference-in-differences method (DID) and finds that GDT is significantly and positively related to LUE, denoting that cities undergoing GDT exhibit increased LUE relative to non-participants. These findings are robust after performing parallel trend tests, conducting the instrumental variable method and propensity score matching methods or entropy balance, considering heterogeneous treatment effects, and using other robustness checks. Furthermore, the heterogeneity analysis shows that GDT has a significantly stronger impact among eastern cities, cities with a greater degree of marketization, or cities with advanced Internet infrastructure. Finally, the rationale behind this effect is that GDT upgrades industrial structures and promotes innovation activities, thereby increasing LUE. This study adds to the literature by providing novel insights into the effects of public sector digitalization and its role in improving LUE.