Understanding local government debt financing of infrastructure projects in China: evidence based on accounting data from local government financing vehicles

Bao, H. X.H., Wang, Z. ORCID: https://orcid.org/0000-0003-0374-346X and Wu, R. L. (2024) Understanding local government debt financing of infrastructure projects in China: evidence based on accounting data from local government financing vehicles. Land Use Policy, 136. 106964. ISSN 0264-8377 doi: 10.1016/j.landusepol.2023.106964

Abstract/Summary

This study develops an analytical framework to investigate the complex relationship between local government debt issuing for infrastructure financing, state control, land finance, and development activities in the private sector in China. Using local government financing vehicles’ accounting data, we find that local governments are working creatively to meet infrastructure development targets handed down by the central government. Moreover, local government financing vehicles became more responsive to development activities from the private sector in their debt issuing decisions after the regulations of local government debt issuing in 2013/14. By modelling the effect of three distinct forces, i.e., the central government, local governments, and the market, in one unified framework, our study provides reliable and practical evidence on how infrastructure financing works in China. Our research extends the studies of land finance into the infrastructure development domain. The findings are also helpful for studies on China’s land use policy under its leasehold land right system, and particularly the impacts of different land planning uses on infrastructure development.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/114378
Identification Number/DOI	10.1016/j.landusepol.2023.106964
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Elsevier
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