WANG Qiao, WANG Lijuan:An Empirical Analysis of Land Revenues and Prices Among 70 Large and Medium-sized Cities of China——Based on Spatial Interaction of Land Revenues

Abstract  The paper studies the spatial interaction of land transfer among 70 large and medium-sized cities of China and classifies land transfers into two types, i.e. bidding, auction and quotation of land use right as well as agreement of land use right, according to the nature of land use right. The former contributes to local revenues through “revenue effect, ” while the latter contributes to local revenues through “investment inflow effect.” Our spatial econometric analysis shows that the interaction strategy of bidding, auction and quotation of land use right is “race to the top, ” pursuing the rise in both revenue and price of land use right. Whats more, the rise in revenue dominates the rise in price, which is prevalent among cities in eastern, middle and western China. However, the interaction strategy of agreement of land use right is “race to the bottom, ” lowering the price of land to attract more investment. This type of interaction strategy only exists among cities in central China, while cities in either eastern or western China do not adopt the similar strategy due to differences in local endowments and the degree of competition among these cities. This paper reveals how the local governments interact for land revenues in China and might provide some theoretical foundation for the central government to regulate the land market.

Key words： Land Revenue      Race to the Top      Race to the Bottom      Spatial Econometrics

Source: Finance & Trade Economics , No.8, 2014