Fiscal decentralization, financial efficiency and upgrading the industrial structure: an empirical analysis of a spatial heterogeneity model

• Published in: Journal of applied statistics Vol. 44; no. 1; pp. 181 - 196
• Main Authors: Liu, Jianmin, Hu, Xiaomei, Wu, Jinguang
• Format: Journal Article
• Language: English
• Published: Abingdon Taylor & Francis 02.01.2017; Taylor & Francis Ltd
• Subjects: Applied statistics; Decentralization; Economic models; Efficiency; Empirical analysis; financial efficiency; Fiscal decentralization; Government spending; GWR; Heterogeneity; Regional development; spatial heterogeneity; Upgrading; upgrading the industrial structure
• ISSN: 0266-4763; 1360-0532
• DOI: 10.1080/02664763.2016.1252733

From the perspective of spatial heterogeneity and using data from 281 prefecture-level cities in China over the 2003-2012 period, we empirically test the interactions and differences in the spatial effects through which fiscal decentralization and financial efficiency influence the upgrading of regional industrial structure. The results indicate that regional differences in fiscal decentralization and financial efficiency lead to significant spatial heterogeneity in upgrading the industrial structure. The interaction mechanism between fiscal decentralization and financial efficiency plays a positive role in promoting the upgrading of the regional industrial structure, which is subject to organic integration between fiscal systems and financial development. Moreover, there is significant spatial dependence in the effects of fiscal decentralization and financial efficiency on upgrading the regional industrial structure, the 'high-lying-land' effects and the 'low-lying-land' effects coexist in the spatial pattern.