A Study on the Relationship Between Land Finance and Housing Price in Urbanization Process: An Empirical Analysis of 182 Cities in China Based on Threshold Panel Models

Scholars have a variety of theoretical explanations for housing price growth. However, few scholars have studied the internal influence mechanism among urbanization, land finance, and housing price. Based on the data of 182 prefecture-level cities from 2009 to 2016, this paper studies the influence of land finance on housing price under different urbanization rate levels. The study finds that with the increase of urbanization rate, the effect of land finance on housing price presents a "U" shape.Specifically, an increase in land finance by 1% results in a corresponding increase in average housing price by 0.18%, with relatively low urbanization rate, 0.06% with medium level of urbanization rate,and 0.38% with high level of urbanization rate.

Land Finance and the Tax-sharing System: An Empirical Interpretation

How has regional competition between local governments contributed to rapid economic growth in China？ That is an issue deserving further exploration. The behavior of local governments has been influenced by central-local relations, especially by the fiscal and taxation reforms undertaken since the implementing of the tax-sharing system. After financial authority was centralized through the tax-sharing system, local governments gradually adopted a development model focusing on land appropriation, development and transfer, i.e., land finance. On the basis of Chinese provincial-level annual data, we can show that there is a close relationship between the tax-sharing system and land finance. Regardless of how we evaluate the land finance development model, the tax-sharing system represents a more rational institutional reform than the old system, because it has created a stable framework of interaction between the central government and local governments. The land-centered urban expansion model is an unforeseen consequence of this reform.

Fiscal Pressure,Land Finance and Ratchet Effects of House Prices

In this paper,we focus on the issues of local governments’fiscal pressure,land finance and house prices,and systematically analyze how local governments’fiscal pressure and land finance lead to China’s ratcheting up of house prices.The results show that to release the fiscal pressure,local governments tend to increase land revenue and obtain high real estate related revenue by raising house prices.In this sense,the increase of the land transfer price will result in the increase of the cost of real estates,and eventually leading to the increase of house prices.That is to say,local governments’fiscal pressure will not only result in the increase of house prices directly but also consolidate the ratchet effects of house prices.

How does land finance effect economic growth in China?--Theoretical analysis and empirical analysis on panel data

Land finance,as the local governments’policy to collect revenue in China,is considered to be related with the economic growth.In this paper,the economy is divided into two sections-traditional Malthus section and modern Solow section in this paper.The effect of land finance on economic growth in China is derived via mathematical method based on economic growth model.The result shows that land finance will transfer the labor from Malthus section to Solow section,which will induce the economic growth.The panel data analysis is used to test the above result.It finds that reducing the farm land and raising the land lease price promote the economic growth.The labor transfer from Malthus section to Solow section caused by land finance do more contribution to economic growth than reducing the farm land and raising the land lease price.

Land Finance,Corporate Leverage and Debt Risk

This paper takes the 2004-2016 non-financial listed companies on Shanghai and Shenzhen stock exchanges as research samples,combined with urban and macro-level data about land use right transfer in prefecture-level cities,and tries to capture the intrinsic link between land finance and leverage of non-financial listed companies.The study finds that the increase in local govermments'reliance on land finance will increase the probability of corporate overleverage.In the case of introducing control variables that may interfere with the cstimation results and using instrumental variables to alleviate the potential endogeneity,the conclusion remains robust.On this basis,this paper further studies the relationship between land finance and corporate solvency and sustainable development capability.It finds that the increase in reliance on land finance will increase the company's short-term solvency risk and future solvency pressure,while reducing the profitability and sustainability of overleveraged companies.This phenomenon is particulatly evident in high-leveraged companies such as real estate companies in regions with lower collateral value,state-owned enterprises,and enterprises in the eastem region.This paper provides a new perspective for further understanding of the high leverage among non-financial enterprises and the prevention and resolution of debt risks in the context of China's supply-side structural reform.

Land finance of Chinese local governments:formation and distortionary effects on urbanization

This paper explores the distortionary effects of the 1994 reform of the system of tax revenue sharing between the central and local Chinese governments and its interaction with the incentives for local officials to promote local economic growth. One of the major distortions was to encourage local governments to rely on land finance in their efforts to promote urbanization and growth. This paper analyzes the causes and effects of increasing dependence on land finance and provides constructive suggestions for solutions to the problems that over reliance on land finance have generated, including their distortionary impacts on the urbanization process.

Economic impact of land finance and subsequent risk response

In China,land finance is actually an endogenous factor in economic growth.As a kind of non-traditional,informal government revenue in China’s economic transition process,land finance is unstable,non-standard and unsustainable,and it simultaneously makes the current land-finance dependent growth mode difficult to maintain.The paper firstly analyzes the impact of the land finance on China’s economic growth and economic structure change followed by discussing the possible risks in post-“land finance”period.It then put forward some suggestions to deal with the problem.The analysis shows that land finance exacerbates the economic fluctuation,bringing in the increase of government public expenditure and economic growth in the short term.Nonetheless,in the long term there is no significant effect,and it could gradually lead to a more unreasonable economic structure.In the post-“land finance”period,if we do not take precautions in advance,it will restrain the sustainable development of China’s economy and society.

Challenges and Countermeasures for the Sustainable Development of Local Finance under the Impact of COVID-19

In recent years,the risks and challenges at home and abroad have increased significantly,and the downward pressure on the economy has increased,especially the implementation of larger-scale tax and fee cuts under the proactive fiscal policy,while the rigidity of local fiscal expenditure has not been reduced,and the sustainable development of local finance is facing greater challenges.In particular,the COVID-19 pandemic has had a serious impact on the already stressed local finance,which has led to the intensifi ed contradiction between local fiscal revenue and expenditure.This paper analyzes the challenges to the sustainable development of local finance under the impact of COVID-19 from four angles:the greater economic downward pressure combined with larger-scale tax and fee cuts,the fiscal relationship between the central and local governments,land finance,and transfer payment,then puts forward the corresponding policy recommendations.