Abstract: This paper explores the impact of land finance on the financialization of enterprises and its underlying mechanisms, by using a sample of Chinese A-share listed firms from 2007 to 2022. First, the paper empirically tests whether land finance promotes investment in financial asset and employs robustness checks and endogeneity analyses by using methods such as variable replacement, the construction of instrumental variables, and external policy shocks to ensure the reliability of the findings. Second, drawing upon theoretical analysis, the paper investigates the mechanisms through which land finance affects financial asset allocation, examining factors such as corporate credit, rent-seeking behavior, and differences in investment returns. Additionally, the paper conducts a heterogeneity analysis, taking the pressures of local economic growth and fiscal demands into account, as well as the political connections of enterprises and their access to commercial credit. Finally, the paper proposes targeted policy recommendations aimed at optimizing fiscal policy and more, informed by the empirical findings.
This study concludes that land finance significantly stimulates financial asset investment of enterprises. This influence occurs primarily through the intensification of the credit crowding-out effect, the exacerbation of rent-seeking behavior, and the widening of the gap between returns on financial and real economy investments. The effect of land finance on financialization is notably heterogeneous: when local governments experience higher economic growth and fiscal pressures, and the role of land finance in promoting financialization becomes more pronounced. Conversely, for enterprises with strong political ties or ample commercial credit, the effect of land finance on financialization is lessened.
Based on these findings, the paper puts forward several policy recommendations. First, the structure of local taxation should be optimized. To counter the trend of corporate financialization driven by land finance, there is a need to better align the fiscal relationships between central and local governments, strengthen the system of direct taxation, and promote a shift toward a higher-quality development model in local tax systems. Second, land market regulation must be enhanced. Rent-seeking behavior related to land resources increases both operating costs and political risks of enterprises, making it essential to improve land oversight and enforcement to enhance the transparency and fairness of the land market. Third, local government evaluation metrics and incentives should be reformed. To reduce the dependence of local economic growth targets on land finance and curb the trend of financialization, local assessment systems should incorporate more indicators that reflect sustainable economic development. Lastly, efforts should be made to broaden financing channels for enterprises. Given the credit crowding-out effect associated with land finance, private enterprises may face challenges in securing adequate credit support. Banks should be encouraged to increase credit to these enterprises, while capital market development should be strengthened to guide them in expanding financing sources and improving their capital structure.

Key words: Land Finance, Financial Asset Investment, Corporate Financialization

摘要： 土地财政作为地方政府行为的一种表现,对企业的金融资产配置决策具有重要影响。本文选取2007—2022年中国A股上市公司为研究样本,剖析了土地财政对实体企业金融资产投资的影响及内在机制。研究发现,土地财政显著促进了企业的金融资产投资。机制分析发现,土地财政通过强化信贷挤出、加剧寻租行为以及扩大投资收益率差距等途径,推动了企业金融化水平的提升。异质性分析表明,对于面临较高地方经济增长压力与财政压力的企业,土地财政显著推动企业金融化;而对于高政治关联或高商业信用供给能力的企业,土地财政对企业金融化的推动作用减弱。本文深化了土地财政的微观经济后果研究,为地方政府在促进实体经济高质量发展及应对实体经济金融化趋势等方面提供了启示。

关键词: 土地财政, 金融资产投资, 企业金融化