Urban subway construction and the advantages of state-owned enterprises in China’s land acquisition market

Abstract

As a scarce resource of social and economic activities, land is a core element of residents' living and business. Since the reform and opening-up in 1978, China's land system has changed from the administrative allocation system to the granting system, and land has gradually acquired market attributes. "Bidding, auction, and listing" has become the most important form of the current land granting. However, under China's land fiscal system, non-market factors will also have a profound impact on the land granting market. In this context, we believe that the stateowned real estate enterprises have a certain advantage in the land "bidding, auction, listing" market. In order to test this hypothesis and explore the underlying mechanism, we use the national land granting data from 2007 to 2019, combined with urban subway construction data, enterprise data and geographic longitude and latitude data for empirical analysis. By establishing the spatial relationship matrix of land and subway at the city level, we analyze the relationship between enterprise type and the spatial advantages of the purchased land. In this paper, we refine the advantage of land acquisition into the distance from the subway station and the time of land acquisition in advance. We find that state-owned enterprises have significant advantages in acquiring land compared with non-state-owned enterprises. On one hand, the probability of the state-owned enterprises to obtain the granting right is significantly higher than that of the non-state-owned enterprises. On the other hand, the land obtained by the state-owned enterprises is closer to the subway station and the acquisition time is earlier than that of non-state-owned enterprises. The empirical results also show that the longer the approval time is, the more obvious the advantage of state-owned enterprises in land acquisition, which reflects the information advantage of state-owned enterprises compared with non-stateowned enterprises.