Research On The Effect Of Administrative Divisions Adjustments On Land Market

The administrative division is an essential policy instrument of national governance and its adjustment has a comprehensive and profound impact on economic and social development.Based on the urbanization process in the past ten years,this thesis focuses on two policies,"city-county mergers"(che xian she qu)and "county-to-city upgrading"(che xian she shi),and studies the impact of two types of different administrative division adjustments on the price of industrial land and residential land using land transaction data.The mechanisms behind the effects of administrative division adjustments are discussed from the perspective of urban development and political power.Finally,this thesis proposed policy suggestions to improve urbanization and the marketization of land allocation.This thesis includes 6 chapters.The content of each chapter is summarized as follows.Chapter 1 presents an introduction to the thesis.This chapter introduces the research background,ideas,and methods in detail and clarifies the possible innovations of this thesis from the perspectives and contents of the research.Chapter 2 introduces the institutional background,existing literature,and related policies in China.This chapter reviews the administrative system and land allocation system in China,summarizes the economic theories closely related to this thesis from the perspectives of agglomeration and decentralization theory,and systematically reviews the domestic and foreign literature on the topics of municipal consolidation,urban spatial policies,city-county mergers,county-to-city upgrading,and the land market.By reviewing the institutional background,existing literature,and related policies,this chapter clarifies this thesis’ s research value and contribution to the literature.Chapter 3 studies the impact of city-county mergers on industrial land markets.The city-county mergers result in a rapid expansion of the central city and a decrease in the independence of surrounding counties.This chapter found that city-county mergers lead to an increase in industrial land prices in the new districts and the increase in industrial land prices was higher in prefectures with a large size and high density.From the perspective of city development,the resulting increase in productive public goods after city-county mergers encourages new enterprises’ entry,which pushes up industrial land prices from the demand side.From the perspective of political power,merging a county into districts is a reallocation of political power between different levels of government.After merging with districts,the previously independent county is directly administrated by the prefecture-level city government and loses part of its independent administrative power,financial power,and development planning power.Since leaders of a dependent district have weaker motivation to intervene in land markets than leaders of an independent county,citycounty mergers decrease government distortion to land markets and improve land prices.Chapter 4 studies the impact of city-county mergers on residential land prices.Merging a county into districts eliminates the administrative barriers hindering the free flow of labor,capital,and other factors and promotes the development of local non-agricultural industries.Population agglomeration and industrial development generate greater housing demand.However,such an increase in housing demand is not reflected in the increase in land supply,resulting in an increase in residential land prices.Chapter 5 focuses on county-to-city upgrading and explores the impact of political power on industrial land prices from the perspective of political economy.As a jurisdictional adjustment policy to speed up urbanization,upgrading a county to a city is,in essence,to promote the transformation of the rural economy to the urban economy through administrative power expansion.This chapter found that county-to-city upgrading leads to a significant decline in industrial land prices.Land price decreases because a large proportion of industrial land is not transferred through land markets.The impact of the county-to-city upgrading on land prices,under the background of new urbanization,shows the path dependence of extensive development and does not comply with intensive and sustainable development strategy.In order to improve the efficiency of land allocation,the market role should be strengthened.Chapter 6 summarizes the research conclusions of the whole paper,puts forward policy suggestions for land marketization,and discusses the possible research directions of administrative division adjustment and land market in the future.The innovation of this paper is mainly reflected in three aspects: research content,research perspective,and research data.Firstly,international research on the adjustment of jurisdiction mainly focuses on municipal consolidation,focusing on the role of economies of scale in public goods provision and political institutions.Domestic scholars analyze the influence of jurisdiction adjustment on the local economy,enterprises,and households.This paper focuses on the land market,expands the scope of research on municipal mergers and adjustment of jurisdiction,and provides evidence of scale economy and political power change after adjustment of the jurisdiction from the perspective of the land market.Second,domestic scholars’ research on the land market mainly focuses on land finance,promotion of officials,and land marketization.This thesis takes administrative division as the breakthrough point and analyzes the influence of citycounty mergers and county-to-city upgrading on land markets.It provides empirical evidence for understanding the change of land markets after jurisdictional adjustment and expands the understanding of relevant literature such as government organization structure.The findings have policy implications.Thirdly,this thesis uses the micro-land transaction data and,combined with the macro-data,comprehensively analyzes the impact of administrative adjustments on land markets.Precisely,this thesis used data from land transaction records published by the China land website,sponsored by the Ministry of Natural Resources.China land website provides reliable data with high quality,including almost all characteristics at the land level,which helps control the impact of other factors on land price to the greatest extent.