How do the biased land use policies reinforce the expectations of"implicit guarantee":evidence from the city investment bond market
In view of the phenomenon of the extraordinary growth of local debt in China,this paper captures the more exogenous institutional factors leading to the"implicit guarantee".Since 2003,the central govern-ment has tilted a large number of construction land quotas to the central and western provinces,while gradually shrinking the land supply in the eastern region.Theoretically,this paper explicates that the biased land use policy strengthens the"bailout ability"in the eastern region and the"bailout expectation"in the central and western regions,thus interfering with the pricing mechanism of the bond market.Based on the provincial panel data from 2009 to 2020,the fixed effect estimation is used to reveal the following findings.As the degree of land supply bias in the eastern region decreases by every one unit,the credit spread of urban investment bond issuance decreases by 1.03 units.As the degree of land supply bias in the central and western regions increases by every one unit,the credit spread of urban investment bond issuance decreases by 0.63 units.As the stability of biased land use index increases by one unit,the interference degree of biased land use policy on the financing costs of inter-regional urban investment bonds increases by about four to five times.It is concluded that the central government should pay more attention to the coordination and cooperation between policies,and the adjustment of land use index that is more in line with the population scale may indirectly improve the efficiency of resource allocation in the bond market.It may be an effective way to prevent and resolve local hidden debt risks through extending the study of governance of default risks in China's local debts from the traditional financial perspective to the mutual interaction of spatial allocation of land elements.
implicit guarantee expectationbiased land use policyimplicit debt financing costs
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万方数据
