Coupling Coordination Between Urban Shrinkage and Land Finance Dependency: Evidence from Liaoning, China

The coexistence of urban shrinkage and land finance dependency poses a distinct institutional challenge to regional development in China. However, the mechanisms linking multidimensional urban decline with reliance on land conveyance revenue remain inadequately understood. Using Liaoning Province as a case study, this research develops a comprehensive indicator system to assess urban shrinkage across demographic, economic, social, and spatial dimensions, and constructs a model to measure land finance dependency. Employing panel data from 2016 to 2023, the study evaluates urban shrinkage and land finance dependency in Liaoning and applies a coupling coordination degree model to explore their spatiotemporal evolution. The results show that 7 of the 14 prefecture-level cities in Liaoning experienced shrinkage. These cities demonstrate a distinct core–periphery spatial pattern and cluster mainly in traditional industrial and resource-dependent regions. Land finance dependency exhibits an inverted U-shaped pattern, peaking around 2020 and sharply declining from 2021 onwards, suggesting a substantial collapse in the fiscal support capacity of land finance within shrinking cities. This study argues that a structural contradiction exists between the growth-oriented land finance model and the emerging reality of urban shrinkage, with traditional fiscal tools becoming irreversibly disconnected from sustainable urban governance in the region. Therefore, a fiscal resilience framework suitable for the post-land-finance era should be established, endogenous urban renewal encouraged, and institutional adjustments tailored to population shrinkage implemented, replacing the conventional land-driven expansion model. This transition has significant implications for old industrial cities in transitional economies.