The sprawl and expansion of urban space has a profound impact on the high-quality development of the economy and society. To explore the causes of urban sprawl is of great significance to the construction of the Chengdu-Chongqing twin-city economic circle and the formation of a new pattern of western development. However, under the dual incentives of fiscal decentralization and official promotion mechanism, local officials often adopt a differentiated land supply strategy for industrial land and commercial land, resulting in a mismatch of land resources between different industries, and changes in the urban spatial structure. Based on the 2009-2017 panel data of Chengdu-Chongqing Twin-city economic circle, an empirical study of static panel model and dynamic panel model shows that the distorted allocation of land resources in different industries will bring about the expansion and sprawl of urban space. The study also finds that urban sprawl has dynamic and continuous changes: the previous urban sprawl has a positive effect on the current urban sprawl. Finally, the paper puts forward relevant policy recommendations in terms of cross-regional balance of construction land and land use efficiency.