An Empirical Analysis Of The Influence Of Land Transfer On The Issuance Of Urban Investment Bonds

The tax-sharing reform started by Chinese government in 1994;the assessment mechanism for local government officials with GDP at the core and the "four trillion" economic stimulus plan launched by the Chinese government in 2008 increase the local government's pressure on fiscal expenditures.Increased fiscal expenditure pressure has further led to increased financing needs of local governments.In order to fill the gap in fiscal expenditures,local governments raise funds by establishing local financing platforms and issuing urban investment bonds.Among many factors affecting the issuance of urban investment bonds,on the one hand,land use rights will be used as collateral to promote the issuance of urban investment bonds.On the other hand,land transfer income can also be an important source of debt repayment for urban investment bonds.Land guarantee and land transfer are inextricably linked to the issuance of urban investment bonds.Existed studies have shown that the increase in land transfer income will increase local government's expectations of future solvency.And it will positively promote the issuance of urban investment bonds.On the other hand,land transfer income and urban investment debt are both important sources of local government fiscal revenue.To a certain extent,the two have a complementary relationship.Therefore,if the local government obtains sufficient fiscal revenue through land transfer to maintain the need for fiscal expenditure,it may reduce the scale of issuance of urban investment bonds through financing platforms.Based on the "dual effect" of land resources,this paper analyzes the relationship between land transfer and the issuance of urban investment bonds based on the analysis of the historical evolution and current status of land transfer and urban investment bonds.The research conclusions are concluded as follows:(1)At the provincial level,overall,the impact of land transfer on the issuance of urban investment bonds is relatively limited.The results of group regression show that in the central and western regions and non-high growth pressure areas,the total land transfer income has a positive and significant effect on the number of urban investment bonds issued.In high GDP areas,the total land transfer income has a positive and significant effect on the amount of urban investment bonds issued.For regions with high land financial dependence,the total land transfer income has a negative and significant effect on the number of urban investment bonds issued.(2)For the prefecture-level cities in the eastern region,land transfer has a positive and significant impact on the number of urban investment bonds issued.For every 1% increase in total land transfer income,the number of urban investment bonds issued increased by an average of 3.168.After excluding the sample of capital cities and the sample of zero bond issuance cities,land transfer has a positive and significant impact on the amount of urban investment bonds issued and the number of urban investment bonds issued.And the results of the lag item of the total land transfer income are still significant.The lagged total land transfer income increased by 1%,the amount of urban investment bonds issued increased by 0.178% and the number of urban investment bonds issued increased by 4.514.(3)Heterogeneity analysis of prefecture-level cities in the eastern region according to city level shows that the influence of land transfer on the amount and number of urban investment bonds issued is more obvious in second-tier cities and above.And the total land transfer income increased by 1%,the amount of urban investment bonds issued increased by 0.272% and the number of urban investment bonds issued increased by 6.046,both of which are higher than the overall level of the eastern region.The research results of this paper theoretically provide a powerful supplement to the relevant research on the chain of "land transfer-urban investment bonds ".In reality,it will provide powerful assistance for the formulation of land market system,standardized management of the bond market and local government debt management.