Does land mortgage financing spur urban economic development? A fresh insight from spatial spillovers

ABSTRACT

This empirical study explores the relationship between land mortgage financing and urban economic development from the perspective of spatial spillovers. We develop a spatial Durbin model (SDM) using a dataset for 83 Chinese cities over the period 2007–2015, and find that land mortgage financing not only promotes local economic development, but also has a positive spatial spillover effect on economic development in other cities. Urban fixed assets investment plays a partial mediation role. However, compared with that of other cities, this positive spatial spillover is significantly weaker for the economic development of megacities and industrial cities.

KEYWORDS:

• Land mortgage financing
• urban economic development
• spatial spillovers
• fixed assets investment

JEL CLASSIFICATION:

• O18
• R12
• C13

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ The data for the dependent variable and control variables came from the “China Municipal Statistics Yearbook”.

² Since the empirical analysis is only for 83 cities, and the simple contiguity matrices would lead to biases in spatial correlation, we set 1000 km as the standard distance.

³ The results of using other matrices are still robust to those in Table 2.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [72074237]