As the collateral for the issuance of urban investment bonds (UIBs), land leasing revenue is the fund that is used to repay the debt with large-scale land hoarding and increasing land price due to China’s rapid urbanization. This paper employs the fixed effect model and panel data from 2006 to 2015 to analyze the influence of land hoarding and price on debt scale and risk of local governments. Results reveal that both land hoarding scale and land price exhibit a positive influence on the UIBs’ scale and risk. However, regional differences are evident. In the Eastern region, the correlation between land asset and UIBs can be testified.
Land value appreciation in the urbanization process has triggered market speculation. The Land Bank System strengthens local governments’
ability to control land supply and distribution rights. Local governments are considered close stakeholders. Under the pressure of guaranteeing economic growth
and promotion, local governments have increased their dependence on land finances. It is important for investors to understand the local governments’ behaviors,
and draw up business strategies. This study aims to examine the influencing factors and formation mechanism of local government land hoarding. The research
hypothesis was tested by collating provincial-level panel data of China from 2004 to 2015 and using dynamic panel data estimated by the Generalized Method of
Moments (GMM). A significant positive correlation was found between residential land price and land hoarding area by local governments. Land speculation in the
eastern region is also more pronounced than that in central and western regions. In addition, empirical studies have found a correlation between the degree of
government intervention and local government land hoarding behavior. The higher the degree of government intervention, the less land sold through bid invitation,
auction, and listing, which are linked to the corresponding hoarding land area.
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