The Impact Mechanism Of Financing Constraints On Land Transfer Strategy Of Local Government

Since reform and opening up,China's economy keeps a rapid growth trend every year,relevant research shows that Infrastructure investment of local government plays a very significant role in this process.Because of the tax system reform in China and Fiscal Decentralization,the fiscal revenue of local government has reduced.The capacity of Endogenous financing is weakened.So,it makes a huge capital gap of infrastructure investment.However,the local government solves the problem of insufficient funds by the land market and the financial market.Land and finance has become an important means of financing for local government.Local government gets great deal of capital through the cooperation of a variety of land transfer and financial market.Local governments take different land transfer strategies that will bring different term structure and different amount of cash flow.From the present situation of our country,it willbring local government land leasing with the transfer of housing land.In addition,the transfer of industrial land will bring a large amount of long-term cash flow to local governments.So,Local governments have the power to improve the structure of land transfer revenue.It can not only meet the current demand for funds,but also can ensure the long-term cash flows.Finance has the function of improving the allocation of resources in time and space.So,the existence of financial markets provides a way for local governments to discount the future long-term income,thus improving the revenue structure of local government.So,whether the local financing constraints will affect the land transfer strategy and affect the development of local economy structure.In this paper,we will analyze it from the perspective of financing constraints by the theory of cash flow.First,paper will analysis local government financing needs,financing sources,financing process and financing structure through the characteristics of the local government financing model and the land transfer strategy in China.What's more,it will analysis that land market and financial market play an important role in the process of local government financing.We will analysis how to let the local government obtain the greatest utility in the land transfer process by the financial market.In the theory of cash flow,assuming that the local government can make a discount on the land transfer revenue through the financial market.The degree of financial market development will affect the ability of local government to discount the land revenue.The more perfect the development of financial market,the stronger the ability of local government to discount.On the contrary,the weaker.Assume that the utility of the local government is determined by the discount of the land revenue.The greater the discount of land transfer income,the greater the effect of the local government in the process of land transfer.The smaller the discount of the land transfer income,the smaller the effect of the local government in the process of land transfer.In addition,when the land transfer revenue is greater than the cost of financing,local government will increase financing to Increase the land development.Then,local government will increase the area of land transfer to access to greater land transfer revenue.So,this paper argues that the local government has the power to get the greatest utility from the land market by the financial markets.At last,we use the mixed regression,fixed effect regression and difference-GMM to analysis the sample data.In the empirical analysis,the level of financial development represents the external financing constraints of local government and the level of fiscal deficit represents the endogenous financing constraints of local government.The total scale of the land transfer represents the local government in the number of land transfer strategy.Ratio of industrial land to housing land represents the local government in the structure of land transfer strategy.The empirical results show that the higher the level of financial development,the greater the scale of local government land transfer,the higher the ratio of industrial land to housing land;The greater the fiscal deficit of local governments,the greater the size of the local government land transfer.But,the fiscal deficit has no obvious effect on the ratio of industrial land to housing land.When the data is divided into the eastern and western cities,and respectively made empirical analysis.The higher the level of financial development in the eastern part of the city,the lower the ratio of industrial land to residential land use.The higher the level of financial development in the western city,the higher the ratio of industrial land to residential land use.