Fiscal Incentives and Regional Economic Growth: a U-Style Relationship
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| Title | Fiscal Incentives and Regional Economic Growth: a U-Style Relationship
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| Author | Shiwei, Liao Junping, Zhang Xuezhi |
| Organization | Lingnan College, School of International Business, Sun Yat-Sen University , Guangzhou |
| Email | shiwei@mail.sysu.edu.cn |
| Key Words | fiscal incentives; economic growth; U style; threshold effect |
| Abstract | The formerly Studies have no standard measurement index of the fiscal incentives, so there is no consistent conclusin on the relationship between fiscal decentralization and economic growth in China. The paper builds two index to measure the fiscal incentives level, the marginal coefficient between fiscal expenditure and GDP augmentation, the ratio of fiscal expenditure to GDP. The paper studies the relationship between fiscal incentives and regional economic growth with provincial government data from 1994 to 2008. We find out a remarkable U style relationship between fiscal incentives and regional economic growth. There is a threshold effect, fiscal incentives can promote economic growth only when it reach the threshold, In reality, fiscal incentives levels are below the threshold in most proviences. Finaly, We control some important factors, such as geography, natural fators and development differences, the conclusion is stable. |
| Serial Number | WP289 |
| Time | 2012-07-13 |
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