Regional coordinated development policy as an instrument for alleviating land finance dependency: Evidence from the urban agglomeration development

Land finance dependency has become an intriguing yet contentious tool for promoting economic prosperity. In China, the impact of regional coordinated development policies on land finance dependency is evident. However, these internal influencing mechanisms have not been unveiled. In response, this paper used the difference-in-difference model to explore the effects of urban agglomeration development on land finance dependency in the Yangtze River Economic Belt (YREB) in China. The findings underscore that urban agglomeration development played a significant role in reducing land finance dependency. Specifically, this impact exhibited negative effects in the Yangtze River Delta and the Middle Reaches of the Yangtze River, while the Chengdu Chongqing Urban Agglomeration experienced positive effects. Furthermore, the effects were found to be more pronounced in mature urban agglomerations compared to those in growing urban agglomerations. Additionally, the moderating effects results indicate that investment incentives, rather than fiscal gaps, played a crucial role in reducing the impact of urban agglomeration development on land finance dependency. However, industrial agglomeration can strengthen the impact of urban agglomeration development on land finance dependency. Consequently, it is advisable to implement tailored top-down policies to promote urban agglomeration development, in order to effectively alleviate land finance dependency and enhance the land finance system. •A framework of urban agglomeration development affecting land finance dependency is proposed.•Urban agglomeration development contributes to reducing land finance dependency.•Geographical heterogeneity and growth cycle heterogeneity can be found in the relationship.•Top-down policies and bottom-up industrial agglomeration should be enhanced.