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Seven super urban agglomerations, governments’ debt risk, and land leasing, China

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  • Juanfeng Zhang
  • Lele Li
  • Danxia Zhang
  • Jie Gu

Abstract

Urban agglomerations are the new feature of China's urban development. Local governments turn to land finance (tudi caizheng) to support super urban agglomeration construction. The issuance of urban investment bonds (UIBs) uses land as the guarantee. Debt repayment depends on land leasing revenue and fees. This study takes UIBs as an example and selects the nonlinear panel model, using the data of 135 prefecture‐level cities from 2006 to 2015 in seven super urban agglomerations, to directly observe the impact of land leasing revenue and leasing scale on UIB issuance, scale, and risk. Empirical results show that land leasing revenue has a positive impact on the possibility of UIB issuance, debt scale, and debt risk, whereas land leasing scale has a negative impact on UIB scale. Differences in the effect of land leasing revenue and land leasing scale are observed among urban agglomerations.

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  • Juanfeng Zhang & Lele Li & Danxia Zhang & Jie Gu, 2021. "Seven super urban agglomerations, governments’ debt risk, and land leasing, China," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2662-2679, December.
    • Handle: RePEc:bla:growch:v:52:y:2021:i:4:p:2662-2679
    DOI: 10.1111/grow.12534
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    2. Mengkai Chen & Ting Chen & Debao Ruan & Xiaowei Wang, 2023. "Land Finance, Real Estate Market, and Local Government Debt Risk: Evidence from China," Land, MDPI, vol. 12(8), pages 1-18, August.
    3. Zhang, Ke, 2023. "Government's implicit guarantee and the credit spread of the quasi-municipal bonds," Finance Research Letters, Elsevier, vol. 55(PA).

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