Influence effects and mechanisms of land marketization on technological innovation in the manufacturing sector

Land resources constitute a pivotal factor in the development of the manufacturing sector. Against the backdrop of China’s accelerated efforts to improve the market-based allocation system and mechanisms for production factors, advancing the market-based allocation of industrial land is directly crucial for driving innovation and achieving high-quality development in manufacturing. This paper, on the basis of constructing a mathematical model, based on the manufacturing patent data of incopat database and the industrial land grant data of each city from 2000 to 2018, and with the background of the reform of industrial land grant auction and listing in 2007, adopts a generalized DID method to investigate the influence effect and mechanism of land factor market allocation on manufacturing technology innovation. The findings reveal that market-based allocation of industrial land significantly promotes regional technological innovation in manufacturing. Mechanism analysis indicates that this effect operates through several channels: a selection effect that improves the quality of incoming enterprises; an industrial structure effect that facilitates the transformation and upgrading of the industrial landscape; a Medici effect that enhances regional knowledge breadth; and a fusion effect that fosters the integration of diverse technologies. Heterogeneity analysis further shows that the innovation-promoting effect of market-based industrial land allocation is more pronounced in eastern regions, within capital-intensive industries, and among manufacturing sectors positioned higher in the global value chain. These findings provide practical insights for China to deepen land marketization reforms in its new development stage, thereby solidifying the foundation for innovation-driven growth in manufacturing.