Land finance has consumed a lot of China's urban land resources while contributing to its economic growth. Urban land expansion, land finance, and economic growth have attracted significant scholarly and social attention. However, the influence mechanisms among them have not yet been fully investigated. Based on a conceptual framework analysis, in this study, the panel unit-root test, system-GMM, panel Granger causality test, impulse-response analysis, and variance decomposition were used to analyze the interactional relationships among urban land expansion, land finance, and economic growth for 30 provinces in mainland China during the period of 2000-2017. The findings show that these three factors interact with each other. Land finance exhibits a positive effect on urban land expansion and economic growth. This result is further supported by the Granger causality tests. Moreover, the VAR Granger causality-test results show a unidirectional causality flowing from urban land expansion to economic growth. The impulse-response analysis also reveals that the responses of urban land expansion to shocks in land finance appear to be positive throughout the 10 periods, which is similar to the reaction of economic growth to shocks in land finance. The result of variance decomposition indicates that the explanatory power of urban land expansion for land finance increased from 0.20% to 1.90%. In contrast, the changes in economic growth made the lowest contributions to urban land expansion and land finance. The latter made the highest contribution to economic growth, with average contribution rate of 65.26%. The findings of this study provide valuable policy implications for China, heading for a high-quality development stage.
Keywords: land economics; land finance; panel-data vector autoregressive (PVAR) model; urban land expansion.