The financing function of land in China has been extensively documented, but little research has explored the role of land finance in the real estate market affecting local government debt. In light of the recent simultaneous increase in China’s real estate market risk and local government debt risk over the past two years, a pressing need to reevaluate the significance of land finance has arisen. Thus, this study explores the role of land finance in the relationship between the real estate market and local debt risk. The data were collected from 224 Chinese cities from 2010 to 2019. The study found that real estate market prosperity significantly promotes the expansion of local government debt. Land finance acts as a mediator and a moderator in this relationship. The study also found that during periods of real estate market booms, local governments tend to sell more land, which reinforces their debt-raising behavior and exacerbates the impact of the real estate market on local government debt; during periods of real estate market downturns, local governments tend to decrease debt, but the government debt repayment risk increases significantly. Furthermore, the amplifying effect of land finance is more pronounced in economically developed regions and cities with higher public budget revenues.

Housing prices in China have experienced rapid growth in recent decades, and land finance has long been discussed as an important factor in this growth. In this paper, we explore the interactions among housing prices, land transfer revenue and infrastructure investment from the perspective of government revenue and expenditure. Based on the panel data of 35 large and medium-sized cities in China from 2000 to 2017, the empirical results show that land transfer revenue, infrastructure investment and housing prices are causally related and result in positive feedback. The grouped regression results show that infrastructure investment has greater impacts on housing prices in eastern region cities than in the other cities. In contrast, in the central and western regions, land sales revenue has a greater impact on housing prices, indicating that cities in less-developed areas are more dependent on land finance than are those in more developed regions. Finally, we use the vector error correction model (VECM) to add control variables for robustness testing. The results show that land transfer income and infrastructure investment have a positive impact on housing prices. Our results provide some references for the stable development of housing markets in China.

We investigate whether multiemployer defined-benefit pension plan (MEPP) underfunding is priced by shareholders and creditors. Prior to the FASB's new MEPP standard (effective December 2011), when the disclosures on such plans were sparse, we find evidence (some evidence) that our estimate of a firm's share of MEPP underfunding is credit (value) relevant. We also find some evidence that a proxy for the funded status of a firm's MEPPs is incrementally value relevant over and above the firm's cash contributions, but no evidence that it is credit relevant. Furthermore, an estimate of MEPP underfunding that incorporates the additional disclosures required under the new MEPP standard is value and credit relevant, both individually and incrementally, over and above our old estimate. Overall, our findings suggest that shareholders and creditors view MEPP underfunding as a debt-like obligation and that the additional MEPP disclosures under the new standard are useful to market participants.