Unlocking the Relationship between Land Finance and Regional Integration

Abstract

Exploring the relationship between land finance and regional integration is of great significance for optimizing the land management system and promoting high-quality development. Previous studies focused on the impact of land finance on regional development, and rarely concerned the role of regional integration on land revenue. This study reveals the internal association mechanisms between land finance and regional integration, which might provide an integrated theoretical and empirical support for the coordinated development between urban land market and regional economy. We firstly provide a theoretically analytical framework for the relationship between the size of land finance, reliance on land finance, and regional integration, and three hypotheses are proposed. On this basis, an econometric analysis is conducted based on the panel data of the urban agglomerations in the middle reaches of the Yangtze River (UAMRYR) from 2003 to 2016. The results show that an increased amount of land finance revenue promotes the level of regional integration. Specifically, for every 1% increase in the size of land finance of UAMRYR, Wuhan city-clusters, and Chang-Zhu-Tan city-clusters, the level of regional integration will increase by 0.000040%, 0.000021%, and 0.000089%, respectively. Besides, the degree of land finance dependence has a negative impact on the level of regional integration. The threshold regression analysis indicates an inverted U–shaped curve could reflect the relationship between the level of regional integration and the degree of land financial dependence. This study argues that the governments in a particular urban agglomeration should clarify the net effect of the size of land finance and their reliance on land finance, and rationally introducing development strategy according to the synergy between land finance and regional integration.