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Academic Journal of Business & Management, 2024, 6(4); doi: 10.25236/AJBM.2024.060434.

The Impact Mechanism of Land Finance on Real Estate Prices: An Empirical Analysis Based on Panel Data from 13 Prefecture-Level Cities in Jiangsu Province


Yichao Wang, Zhuang Yang

Corresponding Author:
Yichao Wang

School of Public Administration, Sichuan University, Chengdu, 610065, China


This study, utilizing panel data from 13 prefecture-level cities in Jiangsu Province, China, spanning from 2010 to 2020, investigates the mechanisms through which land finance influences real estate prices. Employing the Generalized Method of Moments (GMM) model to address dynamic specifications and endogeneity concerns in our analysis, the findings reveal a significant positive correlation between land finance and housing prices. This study delves into the underlying factors driving this relationship, such as urban industrial structure, population density, and the degree of economic openness. The results indicate that the impact mechanism of land finance on real estate prices manifests through local governments' reliance on land finance to accelerate urbanization, creating local industrial advantages. However, this reliance also leads to increased real estate prices through pathways such as scarcity of land supply, cost-pass-through mechanisms, and vicious competition. Drawing on these findings, this paper summarizes the influence and self-reinforcing cycle of land finance on the real estate market and offers corresponding policy recommendations, including advancing fiscal and tax system reform, strengthening regulatory policies, and promoting the development of the rental market and affordable housing construction. By integrating theoretical research with empirical analysis, this study provides a comprehensive understanding of the impact mechanism of land finance on real estate prices, offering valuable insights for the reform of China's land and housing markets.


Land Finance, Real Estate Prices, Panel Data of Jiangsu Province, Local Government Behavior

Cite This Paper

Yichao Wang, Zhuang Yang. The Impact Mechanism of Land Finance on Real Estate Prices: An Empirical Analysis Based on Panel Data from 13 Prefecture-Level Cities in Jiangsu Province. Academic Journal of Business & Management (2024) Vol. 6, Issue 4: 230-239. https://doi.org/10.25236/AJBM.2024.060434.


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