Relationship between land urbanization and the ecosystem service value of land: evidence from Chinese land use

The connection between land urbanization (LU) and the ecosystem service value (ESV) from land is studied theoretically and empirically in this research. Firstly, an optimization model with constraints in which the externality of land development and construction is internalized into decision-making behavior of local governments is established to theoretically find out the potential link between urbanization and ecosystem value; then, an empirical analysis using cross-section dataset of 280 cities in mainland China in 2010 is conducted to verify the theoretical results. It could be concluded that the influence of LU on ESV of land depends on phase of economic development. When the unit conveyance fee’s marginal effect of requisitioned land is greater than the unit compensation’s marginal effect of this land, LU exerts a negative impact toward ESV of land and vice versa. An empirical analysis indicated a U-shaped curve between LU and the ESV of land, biodiversity, carbon sequestration, soil retention, and water retention. However, the effect of LU on ESV is currently still negative. These results held up significantly after endogeneity tests and some robustness tests. Finally, we suggest that Chinese government should promote innovations in terms of the pattern of land use as well as institutions.