The Research about the Influence of Urbanization and Industrialization on Land Financial Dependence of Local Government in China

Urbanization and industrialization strongly affect the land finance of local government and the effect varies in different stages of economic development in China. Based on the provincial panel data from 2005 to 2009, this study divides the 31 provinces in China into I, II and III economic development stages and make variance analysis between different regions. After analyzing, the result indicates that the land financial dependence in China is universally inevitable currently and regional differences of the effects exist. In the regions at Stage I, urbanization and industrialization exert little effect on land finance; whilst in regions at Stage II, with the rise of urbanization and industrialization, their effects on land financial dependence ascend gradually. In addition, the degree of effects of industrialization is larger than that of urbanization in regions of Stage II. However, in regions at Stage III, the dependence of urbanization and industrialization on land finance begins to detach. That is, the dependence rises with the rising of urbanization and drops with the rising of industrialization, and this detach is in keeping with the fact that urbanization lags behind industrialization in China. According to above results, different economic regions should adopt differentiated land-use policies in future.