Central Government's Infrastructure Investment across Chinese Regions: A Dynamic Spatial Panel Data Approach

This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial i...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Zheng, Xinye, Li, Fanghua, Song, Shunfeng, Yu, Yihua
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2013
Subjects
Federal government
Infrastructure
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Summary:This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central government's investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.