Research On The Impact Of Industrialization On Local Governments’Dependence On Land Finance

Since the tax reform, local governments’ dependence on land finance is deepening, which brings a hug risk to sustainable and healthy local development. It is worth noting that the dependence is deepening with industrialization and urbanization. With the advance of industrialization, the demand for industrial land is growing. And unlike the high price of commercial and residential, industrial land is often used as the weight of the local government to attract investment to sold out in low price Therefore, the industrialization has a special impact on local governments’ dependence on land finance.Summarizing the achievements of the domestic and foreign researches, this paper sorts out the definition and causes of land finance and analyses the linkage between industrialization and land finance with timeline of the development of industrialization. Then this paper analyses the impact mechanism of industrialization on local governments’dependence on land finance in two dimensions——level of industrialization and industrialization model. Finally, using panel data regression model with data from11cities in Zhejiang province proved that the industrialization has positive influence on local governments’dependence on land finance.The perspectives and innovative points of this article are as follows:First, according to the current our country industrialization’s level and stage, industrialization enhance the local governments’ dependence on land finance. Second, the industrialization reduces the local financial pressure and beneficial to the officer’s evaluation. Therefore, industrialization has a chance to reduce the dependence. But, in order to obtain the benefits of industrialization, the local governments provide "premium subsidy" to investors, which weakens and offsets the benefits of industrialization. Third, for the industrial land price cost is passed on to the commercial and dwelling land, indirectly contributed to the rising price of them.In this paper, cross analysis of industrialization and the land finance, to a certain extent, reflects the local industrial development impact on the land finance, so as to solve the problem of local governments’dependence on the land finance provides a new idea.