Study On Economic Growth Effect Of Marketization Of Urban Land Transfer

Since the reform and opening up,market-oriented reforms have promoted the improvement of the efficiency of factor allocation,which has brought a world-renowned "growth miracle" to the Chinese economy.However,after the 2008 financial crisis,the distortion of the allocation of production factors led to a significant decline in Total Factor Productivity(TFP).In the market of production factors,the marketization has been achieved for capital and labor,however,the land market is less developed,which causes serious distortions in the allocation of land resources and impacts TFP negatively by affecting other factor input combinations.Futhermore,the less developed land market threatens largely the sustainable and stable development of the economy.Based on this,Chinese government promulgated and implemented the "Regulations on the Transfer of State-owned Land Use Rights by zhaobiao,paimai and guanpai" and the "Regulations on the Transfer of State-owned Construction Land Use Rights by zhaobiao,paimai and guanpai" in 2002 and 2007 respectively,which established the market-oriented reform direction of urban land transfer by replacing free allocation and agreement transfer with "zhaobiao,paimai and guanpai" transfer.In 2017,the marketization reform for production factors has been promoted as the core task of the current economic reforms in the 19 th National Congress of the Communist Party of China.In 2020,to further boost the economy through the reform of production factor marketization,the central government issued the "Opinions on Constructing a More Complete Factor Market Allocation System and Mechanism"(hereinafter referred to as the "Opinions"),which reaffirms the direction of factor marketization reforms,emphasizes the prominence of the land market reform,and highlights the importance and urgency of the land market reform.The Marketization of Urban Land Transfer(MULT)is expected to have great impact on improving the efficiency of resource allocation and providing new growth drivers,however,in reality,the influence of MULT remains to be investigated,in other words,what is the current level of MULT? Can the MULT be the new engine for the economic growth? What is its theoretical basis? Does the existing reform experience meet the policy needs of the "Opinions" ?To answer the above questions,this paper first uses a large sample of micro transaction record to assess the level of MULT,and then constructs a theoretical analysis framework to analyze the path of MULT affecting economic growth and implement empirical tests.This study show that the MULT affects economic growth through three channels: structural optimization channel,investment expansion channel,and technological progress channel.For structural optimization channel,in terms of micro level,the mobility of capital and labor is improved by the MULT,and the allocation distorsion is reduced,thus,the MULT stimulates the economic growth.In terms of medium level,on the one hand,the MULT stimulates the advanced development of the industrial structure,accelerates the process for the economy of entering the "structural slowdown" path,and inhibits economic growth.On the other hand,the MULT has positive impact on economic growth by promoting the rational development of the industrial structure,however,this positive effect will be mitigated with the increase of the MULT.For investment expansion channel,the MULT promotes land capitalization and land financing,which in turn stimulates economic growth through the expansion of fixed asset investment.For technological progress channel,the MULT promotes technological progress through scale effect,cost effect and institutional environmental effect,which is conducive to economic growth.The analysis of regional heterogeneity find that,in eastern cities,the MULT promotes economic growth by improving the efficiency of factor allocation,promoting investment and technological progress;while in the central and western cities,the impact is not significant,and economic growth is mainly affected through investment.This study also find that the positive relationship between the MULT and economic growth will be attenuated by the interaction effect between land finance and the MULT.This paper contributes to current literature in the following aspects: First,from the theoretical perspective,this paper systematically analyzes the path and mechanism of the impact of the MULT on economic growth.The theoretical analysis framework is ignored in previous studies,especially the analysis of the mechanism.Under the framework of neoclassical economic growth theory,based on economic growth accounting theory,this paper constructs a theoretical analysis framework to comprehensively and systematically analyze the mechanism of MULT through structural optimization channel,investment expansion channel and technological progress channel.This study enriches the literature of economic growth,and also deepens and expands the research on the impact of marketbased allocation of land factor on urban economic growth,and it provides a theoretical basis for relevant empirical research.Second,this paper improves the evaluation index system for the MULT,uses a large sample of micro-data to evaluate the level of MULT to solve the problem of overestimation of the level of MULT of current research.Previous studies treat the three transfer methods of zhaobiao,paimai and guapai as equal,which not only fails to accurately assess the level of MULT,but also increases the bias of relevant empirical research.In this paper,a large sample of micro-transaction record data are used to distinguish between "zhaobiao","paimai" and "guapai",the price,number and area information of different transfer methods are applied to assess the level of MULT,and the results show that the level of MULT has not been improved much during the sample period.This conclusion provides a strong evidence for the debate on the effectiveness of MULT reform,and also provides solid empirical evidence for empirical research related to MULT.Third,the impact of the interaction effect between land finance and MULT on economic growth is theoretically analyzed and empirically tested of.Previous studies do not distinguish and control the impact of land finance,which may lead to serious estimation bias.This paper distinguishes these two in terms of concept,and then theoretically analyzes and empirically tests the impact of the interaction effect between land finance and MULT on economic growth,where land finance represents the government’s will and the MULT is regarded as a market force respectively.Their relationship plays a key role in understanding Chinese classical economic growth of cities.Fourth,current research neglect the technological progress channel and structural optimization channel,this paper is complementary to this study.Under a unified theoretical framework,from micro-level to macro-level,this paper investigates the mechanism of MULT on economic growth through structural optimization channel,the investment expansion channel and the technological progress channel.This study helps to comprehensively and systematically understand the internal connection between land resource market allocation and economic growth,and also provides an empirical basis for China’s policy deployment to enhance economic growth momentum through factor market reforms.