Abstract Under the background of fiscal decentralization, the correlation between local tax competition and public goods supply have become one of the most popular topics in public economics with the continuous improvement of the market economic system and the increasingly prominent drawbacks of the incentive mechanism of local government performance. Based on the 2007-2015 provincial panel data, this paper constructs a spatial autocorrelation model and a spatial error model that entail random effects. Placing the local tax competition and expenditure competition under the same empirical framework, the paper then analyses the influence of tax competition on six public expenditures, namely education, science and technology, culture, sports and media, social security and employment, health care,and environmental protection. The results show that there is significant spatial complementation effect in the per capita values in those six expenditures, while there is negative effect from tax competition on all six expenditures. Both effects show consistence in intensity on different expenditure categories, thus forming an anti-distortion effect.
HOU Ming,CHANG Ge,QU Yang. A Study of Response of Public Goods Supply on Tax Competition of Local Government —An Empirical Analysis Based on Spatial Panel Model. Economic Survey, 2019, 36(2): 0158.
2019, Vol. 36 
