How the Marketization of Land Transfer Affects High-Quality Economic Development: Empirical Evidence from 284 Prefecture-Level Cities in China

Abstract

The allocation of urban land from planned to market-oriented is an important part of China’s economic market-oriented reform, but its impact on high-quality economic development still lacks direct testing. Based on the data of prefecture-level city panels from 1999 to 2019, this paper analyzes the impact mechanism and effect of land transfer marketization on the high-quality development of urban economy by constructing multiple land transfer marketization indicators. The study found that the marketization of land transfer has a significant role in promoting high-quality economic development in the long run. The specific mechanism is that the marketization of land transfer affects the high-quality development of the economy through the financing effect and the resource allocation effect. The degree of marketization of land transfer can be increased, which can not only promote the expansion of production scale by increasing the degree of land capitalization and increasing the scale of urban financing, but also improve the efficiency of resource allocation by giving more effective play to the land price signal and guiding the combination of production factors to match more effectively. However, this paper also finds that the effect of land financing has a very complex impact on resource allocation, and the impact of financing in the primary and secondary land markets on the efficiency of resource allocation is generally completely different. The research results of this paper have rich policy implications and have practical reference value for evaluating and improving the current urban land transfer system. In the future, we should continue to improve the land transfer system in the direction of marketization, reduce the improper administrative interference of local governments in land transfer, improve the level of marketization of the primary land market, and further develop the secondary land market.