• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Quaterly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Managing Editor: Ms. Shira. W. Lu
    • Abstracting/ Indexing:  Crossref, Electronic Journals Library , EBSCO
    • E-mail: ijtef.editorial.office@gmail.com
HOME > Archive > 2023 > Volume 14 Number 2 (May 2023) >
IJTEF 2023 Vol.14(2): 12-16 ISSN: 2010-023X
DOI: 10.18178/ijtef.2023.14.2.749

An Empirical Analysis of Fiscal Decentralization’s Effect on the Local Government’s Land Finance: Evidence from Provinces in China

Chuanzhi Huo

Abstract—The purpose of this paper is to supplement the empirical evidence of the relationship between fiscal decentralization and land finance in China, and to prepare for subsequent research. In this article, data from 1999 to 2017 were collected and analyzed. Based on panel data, regression analysis, time heterogeneity analysis and regional heterogeneity analysis are conducted. In the results, a strong positive correlation is found between the two variables. In the analysis of time heterogeneity, taking 2007 as the dividing point, since when the land transfer fee has been included in the budget, the regression results are completely different in the two periods. In the previous period, the coefficient of fiscal decentralization is greater and more significant than that in the later period. In the analysis of regional heterogeneity, a strong positive correlation is shown in each region. Besides, the degree of dependence on land finance affected by fiscal decentralization is completely opposite to the level of regional economic development. In other words, in economically developed regions, land fiscal dependence is less affected by fiscal decentralization, vice versa. Based on the time heterogeneity and regional heterogeneity of fiscal decentralization's dependence on land finance as described above, it is reasonable to believe that the expansion of financial rights of local governments, comparing to the central government, is positively related to the promotion of land transfer in the local area.

Index Terms—Land finance, fiscal decentralization, empirical analysis, heterogeneity analysis, China

The author is with China Agricultural University, Beijing 100083, China (chesterhuo@foxmail.com).

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Cite: Chuanzhi Huo, "An Empirical Analysis of Fiscal Decentralization’s Effect on the Local Government’s Land Finance: Evidence from Provinces in China," International Journal of Trade, Economics and Finance vol.14, no.2, pp. 12-16, 2023.

Copyright © 2023 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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