Tax Sharing Reform and Urban Housing Prices in China:Evidence from Provincial Panel Data
研究了1994年税收分成改革如何通过土地财政推高中国城市房价，发现财政失衡促使地方政府依赖土地财政，进而显著推高房价，且财政分权程度会强化这一效应。
This paper investigates the institutional evidences which push up the urban housing prices in China through examining the relationship among tax sharing reform,land finance and housing prices.The data say that the higher housing prices are correlated with the larger scale of land finance of subnational governments,meanwhile, the formation of which is closely correlated with fiscal reform started in 1994.Using provincial panel data from 2000 through 2008,this paper empirically researches on the formation of the land finance and the effects of land finance on the urban housing prices in China,respectively.Our study finds that the fiscal imbalance based on the tax sharing system is one of significant factors that induce subnational governments to pursue land finance. When controlling potential factors affecting housing prices,the scale of land finance has substantially positive impact on urban housing prices,and this positive effect will be strengthened duo to the expansion of degree of fiscal decentralization.Our results are robust to replacement of key variables and estimation methods and a range of specification checks.