The impact of housing prices and land financing on economic growth: Evidence from Chinese 277 cities at the prefecture level and above

Many scholars believe that there is a Kuznets inverted U-shaped curve between land finance and economic growth-that is, land finance is conducive to economic growth in the short term, but excessive dependence on land finance will inhibit economic growth [31, 32]. On the relationship between land finance and housing prices, a large number of studies have found that land finance has a positive impact on housing prices. Under the championship model, local governments often sell industrial land at land prices to attract investment and obtain tax revenues; Selling residential land at a high price to obtain land transfer fees increases fiscal revenue. The core factor affecting land finance is the price of urban land, and economic growth will affect the price of land by affecting the demand and supply of land. The second one is finance for land: land finance includes not only land transfer income, but also land-related real estate taxes and bank income obtained by mortgaging land. Taking land finance as the explained variable, the dynamic effects of economic growth, land finance, housing price, and residents' income level on land finance are significantly positive at the levels of 1 percent and 5 percent, respectively, indicate that China's land finance has formed a positive feedback in the time series and the increase in economic growth, housing price, and residents' income level has significantly promoted land finance. For land finance, the contribution of economic growth and housing prices is also gradually increasing, and the final stable value is stable at about 0.4, indicating that the contribution of economic growth and housing prices to land finance is not much different, probably because land finance is more relevant to the land policies of cities. There is a one-way Granger causality between economic growth and land finance, and economic growth is the Granger cause of land finance; there is a one-way Granger causality between land finance and housing prices, and housing prices are the Granger cause of land finance.