(1.China School of Economics and Management,University of Fuzhou; 2.School of Economics, Huazhong University of Science and Technology)
Abstract: This paper, based on the panel data collected from 289 prefecture-level cities in China between 2004 and 2013, discusses, from a spatial economics perspective, how land finance influences short and long term economic growth. It then goes on to introduce the decoupling index to measure the quantitative relationshipbetween land finance and economic growth. Through theoretical and empirical analysis, reached are the following conclusions. Firstly, there exists a substantial regional difference between the absolute and relative land finance value in the 289 prefecture-level cities in China from 2004 through 2013. To be more exact, the eastern coastal regions exhibit a much higher absolute and relative value than the central and western regions. Furthermore, in both the eastern coastal regions and the central and western regions, a relative decoupling relationship is always found between the local land finance and economic growth. Secondly, by calculating the global Moran index (MI), it is found that, whether it is based on geographic proximity weights, geographic distance weights or economic distance weights, both the land finance and economic growth in 289 Chinese prefecture-level cities are greater than 0 from 2004 through 2013, presenting a positive spatial correlation between the land finance and economic growth in the area during the said period. Finally, through the static Spatial Dubin Model empirical test, it is found that whether it is based on geographic proximity weights, geographic distance weights or economic distance weights, the relationship between land finance and economic growth shows an inverted U-shaped curve, which means that while the land finance is conducive to short-term economic growth, excessive land finance will curb economic growth in the long run. The paper, therefore, recommends that, in order to make full and reasonable use of land finance to promote sustainable economic growth and social development, concrete measures should be taken to treat land finance cautiously, to reform the land fiscal and taxation systems as well as the promotion mechanism for officials, and to strengthen the interregional cooperations.
Key Words: Land Finance; Financial Power; Urbanization; Economic Growth