Abstract
Although substantial studies emphasized the close relationship among land development, public infrastructure, and urban economic growth, the mediating effect of public infrastructure remains unexplored. Using panel data of 253 prefecture-level Chinese cities from 1999 to 2012, we empirically conduct a mediating effect analysis to examine how land development promotes urban economic growth. It is found that land development has a positive impact on public infrastructure, whereas the construction of public infrastructure is positively related with urban economic growth. Therefore, land development exerts a positive influence on urban economic growth through one important mediator: public infrastructure. It is also found that the mediating effect of public infrastructure is partial. The estimation results are robust to various specifications and sensitivity analysis.
Highlights
China’s land policy has experienced dramatic changes in the past decades
It is found that land development has a positive impact on public infrastructure, whereas the construction of public infrastructure is positively related with urban economic growth
Land development exerts a positive influence on urban economic growth through one important mediator: public infrastructure
Summary
Local governments are authorized with monopolistic power in land acquisition and deposition in land developing. The unbalanced administrative rights and financial power made local officials have little option but to take on the role of land developers in China’s primary land market [1]. From 1999 to 2012, the area of urban construction land increased by 119%, from 2.08 ˆ 104 km to 4.57 ˆ 104 km. Existing studies reveal that land development has two kinds of impacts on urban growth [4,5]. The first one is the expansion of urban construction land and the second one is the substantial increase in land revenue. Our research focuses on land revenue which local officials acquired during the land development. According to the different obtaining ways, we divide land revenue into land conveyance revenue and land finance revenue
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