["Journal of Regional Science, EarlyView. ", "\nABSTRACT\nCombining micro data of DZs, land and firm in China, this study examines the impact of DZs on land lease price and its productivity premium by using Boundary Discontinuity (BD) model and the unconditional distribution characteristic‐parameter correspondence method. Under the condition of market‐oriented allocation of land resources, the increase in land demand brought about by the agglomeration of firms in DZs and the tight supply of land will jointly promote the land lease price in DZs. Moreover, increasing the DZs' land lease price raises the entry threshold of firms, thereby reducing the entry proportion of inefficient firms due to the selection effect, and enhancing the productivity of incumbent firms under the influence of competition and agglomeration effects. Land lease price is an important mediator variable for place‐based policy to promote firms' productivity.\n"]