Abstract

As China’s economy advances into a new stage of high-quality development driven by scientific and technological innovation, it is of great practical importance to probe what effects land disposition, which underpinned the previous round of rapid economic growth, and may have an exertion on developing innovation. Based on a deep exploration of the potential positive and negative influences of land disposition in relation to the effects of land finance on urban innovation, we employed a dynamic spatial Durbin model, along with panel data from 266 Chinese prefecture-level cities over the period 2004–2017. The empirical results show that the development of China’s urban innovation has had significant path dependence, spatial agglomeration, and inhibiting effects on neighboring cities, and these effects are attributed to inter-governmental competition and the Matthew effect. Overall, the combined impacts of land disposition modes on urban innovation have changed, from facilitative in the early stage to inhibitory at present. In the developed cities of east China, the facilitative effect of land disposition has weakened gradually, and tends to disappear entirely, while the change in impact over time in less developed mid-western cities is consistent with the national sample. This study broadens our understanding of the role of land disposition in China’s urban innovative development and has meaningful direct implications for policymakers.

Highlights

  • Land finance is generally employed by local governments to augment fiscal revenue in China, which is characterized by the heavy reliance of local governments on land-related income [1–3]

  • Ensuring an abundant supply of industrial land parcels at a lower price in order to attract investments, and strategically limiting land provision for commercial and residential use at very high prices in order to collect funds, are two prevalent land disposition modes derived from land finance, and they in turn are of great help to local governments with regard to maximizing their land finance [2,3,8–14]

  • The results suggest that the LMeffects, test results under space and time double-fixed as regarding well as the resu both the spatial lag model (SLM) and the spatial error model (SEM) are significant at the 1% level

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Summary

Introduction

Land finance is generally employed by local governments to augment fiscal revenue in China, which is characterized by the heavy reliance of local governments on land-related income (such as land transfer, lease, and tax fees) [1–3]. Since the tax-sharing reform in 1994, it has become urgent for local governments to seek extra-budgetary revenue in order to relieve financial pressure as well as promote local development [4,5]. With land finance as an arguably irreplaceable driver, land-centered urbanization and industrialization (yi di mou fa zhan) have both contributed notably to China’s remarkable economic performance in the past few decades [6,7]. Underpinned by land finance, the previous round of China’s economic development has been distinguished by high-speed growth, and is widely considered “a growth miracle” [15,16]. The GDP (Gross Domestic Product) of the whole country had soared from

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