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- Publisher Website: 10.1016/j.jdeveco.2015.04.003
- Scopus: eid_2-s2.0-84929659571
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Article: Fiscal incentives and policy choices of local governments: Evidence from China
Title | Fiscal incentives and policy choices of local governments: Evidence from China |
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Authors | |
Keywords | Fiscal federalism Fiscal incentives Land conveyance Local governments Revenue sharing Simulated instrumental variable Urbanization |
Issue Date | 2015 |
Citation | Journal of Development Economics, 2015, v. 116, p. 89-104 How to Cite? |
Abstract | © 2015 Elsevier B.V. This paper examines how fiscal incentives affect the policy choices of local governments in the context of China. Based on exogenous changes in the intergovernmental revenue-sharing scheme, we construct a simulated instrumental variable to resolve the endogeneity problem. We find evidence that local governments shifted their efforts from fostering industrial growth to "urbanizing" China, i.e., to developing the real estate and construction sectors, when their retention rate of enterprise tax revenue was reduced. The increase from the new revenue source compensated for half of the losses in revenue that resulted from the reassignment of fiscal rights. The reassignment had also the effect of retarding the industrial growth of domestically-owned firms in particular. |
Persistent Identifier | http://hdl.handle.net/10722/256720 |
ISSN | 2023 Impact Factor: 5.1 2023 SCImago Journal Rankings: 3.737 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Han, Li | - |
dc.contributor.author | Kung, James Kai Sing | - |
dc.date.accessioned | 2018-07-24T08:57:43Z | - |
dc.date.available | 2018-07-24T08:57:43Z | - |
dc.date.issued | 2015 | - |
dc.identifier.citation | Journal of Development Economics, 2015, v. 116, p. 89-104 | - |
dc.identifier.issn | 0304-3878 | - |
dc.identifier.uri | http://hdl.handle.net/10722/256720 | - |
dc.description.abstract | © 2015 Elsevier B.V. This paper examines how fiscal incentives affect the policy choices of local governments in the context of China. Based on exogenous changes in the intergovernmental revenue-sharing scheme, we construct a simulated instrumental variable to resolve the endogeneity problem. We find evidence that local governments shifted their efforts from fostering industrial growth to "urbanizing" China, i.e., to developing the real estate and construction sectors, when their retention rate of enterprise tax revenue was reduced. The increase from the new revenue source compensated for half of the losses in revenue that resulted from the reassignment of fiscal rights. The reassignment had also the effect of retarding the industrial growth of domestically-owned firms in particular. | - |
dc.language | eng | - |
dc.relation.ispartof | Journal of Development Economics | - |
dc.subject | Fiscal federalism | - |
dc.subject | Fiscal incentives | - |
dc.subject | Land conveyance | - |
dc.subject | Local governments | - |
dc.subject | Revenue sharing | - |
dc.subject | Simulated instrumental variable | - |
dc.subject | Urbanization | - |
dc.title | Fiscal incentives and policy choices of local governments: Evidence from China | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jdeveco.2015.04.003 | - |
dc.identifier.scopus | eid_2-s2.0-84929659571 | - |
dc.identifier.volume | 116 | - |
dc.identifier.spage | 89 | - |
dc.identifier.epage | 104 | - |
dc.identifier.isi | WOS:000358625900007 | - |
dc.identifier.issnl | 0304-3878 | - |