Abstract Investment is an important policy means for local governments to promote economic growth. Financial incentives and political promotion are important motives that affect the economic behavior of local governments.Based on panel data of 30 provincial governments, this paper empirically analyzes the impact of fiscal decentralization and jurisdictional competition on local government investment. The main conclusions are: in areas with higher fiscal decentralization, the power of market entities is more active as opposed to a weaker government investment in areas whose source of funds is within the budget. When measuring the investment of local governments against the fixed assets investment of the whole society, fiscal decentralization is positively related to local government investment, reflecting that fiscal decentralization enables local governments to have the ability and space to exert influence on market entities so as to expand the scale of investment. The competition among jurisdictions and local government investment are positively correlated in various regression analyses, reflecting the tendency of local governments to expand investment, optimize investment environment and attract liquid capital.
YIN Qiang,FENG Hui. The Chinese-style Fiscal Decentralization, Jurisdictional Competition and Local Government Investment —Analysis Based on Provincial Panel Data. Economic Survey, 2019, 36(5): 0143.
2019, Vol. 36 
