A Research On The Regional Innovation Effect Of Chinese-style Fiscal Decentralization

To promote regional innovation development is an important driving force of cultivating new momentum of economic development and accelerating the conversion of new and old kinetic energy,which is also the key to solving the problem of unbalanced and inadequate development.With the further reform on China's supply-side reform,comprehensive implementing innovation-driven development strategy and speeding up the construction of an innovative country,the regional innovation is particularly important.Therefore,how does local government strengthen the regional innovative vitality,which has become one of the issues concerned by the academia and decision-makers.It's worth noting that the government plays an important role in the innovation system,including formulating the innovation strategy and guiding the direction of innovation,shaping the innovation environment and providing innovative services,and actively providing policy support and fiscal and tax guarantee for innovation subjects to carry out innovation activities.Therefore,innovation is not only the result of market choice,but also the result of government promotion.It's worth noting that the Chinese-style fiscal decentralization characterized by economic decentralization and political centralization largely influence government behaviors.Since China's reform of tax allocation in 1994,China's fiscal and tax system reform gradually adapt to the market economic system,which establish a more standardized and scientific institutional platform for the relationship between the central and local governments,bring the Two-source Initiative into play.The fiscal decentralization not only enhances the Central Government's choice of macro-control ability,but also provides an incentive system to promote local economic growth.Therefore,Chinese-style fiscal decentralization can largely influence local government behavioral decisions and encourage governments to pay more attention to the local economic development.Innovation activities as a important economic behavior of regional development,does the fiscal decentralization influences regional innovation? However,few literature have focused on the impact of fiscal decentralization on regional innovation.Based on the above background and reasons,it has important theoretical and practical significance to study the effect of fiscal decentralization on regional innovation,also,to analysis and empirical study the internal mechanism of fiscal decentralization affecting regional innovation.This thesis focuses on the core research topic that whether the fiscal decentralization can promote regional innovative level,and systematically explores three main issues based on the theoretical research,the characteristic fact analysis and the empirical research,that is the direct effect of fiscal decentralization on regional innovation,the relevant mediating effect of fiscal decentralization affecting regional innovation,the spatial effect of fiscal decentralization on regional innovation.The theoretical research of this paper show that:Firstly,taking the Chinese decentralization system as the background,the multitask principal-agent model shows that the relative economic decentralization has a negative impact on the implementation of regional innovative policies,but the relative centralized power in politics weakens the negative effect of economic decentralization.Secondly,fiscal decentralization imposes constraints and incentives on government fiscal behavior,and the fluctuation of local fiscal behavior becomes an important factor affecting the effect of regional innovation.Among them,financial investment in science and technology,division of science and technology authority,local taxation and land finance have become the key factors influencing regional innovation and development.Finally,The influence of chinese-style fiscal decentralization leads to the effect of "competition for excellence" in regional innovation.Governments will conduct "competition for innovation" based on the innovation of neighboring or surrounding regions.The empirical research of this paper finds that:This paper mainly applies the fixed effect model,mediating effect model and dynamic panel spatial Dubin model technique to examine the direct effect,mediating effect and spatial effect of fiscal decentralization on regional innovation based on the data of 30 provincial-level administrative regions in China from 2000 to 2017.The main conclusions are as follows:Firstly,the incentive mechanism of fiscal decentralization in China has indeed improved the effect of regional innovation,and the fiscal decentralization has obvious regional differences in the impact on regional innovation.From regional perspective,the fiscal decentralization in the eastern regions has a significant effect on regional innovation,but the fiscal decentralization in the central and western regions has no effect on the regional innovation.Secondly,there is a "single threshold effect" on the impact of fiscal decentralization on regional innovation.When the intensity of fiscal decentralization is lower than the threshold value,the impact of fiscal decentralization on regional innovation is not significant.When the intensity of fiscal decentralization crosses the threshold value,it significantly promotes regional innovation.Thirdly,based on the perspective of local fiscal behavior,fiscal decentralization incentive mechanism has a significant mediating effect on regional innovation.The influence of local financial input in science and technology and the decentralization of innovation authority,expenditure responsibility from the central government to local governments and local tax effort degree on regional innovation have a partial mediating effect.However,the effect of and land finance strategy implemented by local government on regional innovation has a certain "masking effect".The results of the test of the intermediary effect of fiscal decentralization incentive mechanism on regional innovation in the eastern region are consistent with those at the national level,while those in the central and western regions are not significant.Forth,regional innovation has a positive spatial spillover effect,and adjacent or peripheral areas have formed a good effect of collaborative innovation agglomeration.From regional perspective,innovation in the eastern,central and western regions also has a positive spatial spillover effect.The eastern coastal areas and some central areas are in the form of “high-high” spatial distribution.However,most of the“low-high” and “low-low” areas are in the northwest,southwest and northeast.Finally,the influence of chinese-style fiscal decentralization leads to the effect of "competition for excellence" on regional innovation,which will show different effects due to regional differences.The influence of fiscal decentralization on regional innovation in eastern and central regions has a spatial "competitive for excellence" effect,while the influence of fiscal decentralization on regional innovation in western regions has a spatial "bottom-by-bottom" phenomenon.This study has important policy implications for chinese-style fiscal decentralization reform and promoting regional innovative development in the future.Fiscal decentralization reform and regional innovative development can achieve a win-win situation.Firstly,the incentive system of fiscal decentralization to promote regional innovation should be reformed and optimized around official governance,system design,people's sovereignty and supervision mechanism.Secondly,different from the previous model of promoting regional innovation policy,the policy choice of promoting regional innovation development in the new period should introduce the concept of fiscal governance,and the use of fiscal policy to promote regional innovation-driven development has become an inevitable choice.The public financial supporting for regional innovative development should set about from the following four aspects: increasing the fiscal expenditure for innovation,improving two-way decentralization in science and technology as well as regulating the local tax competitive behavior and expansionary behavior of local land transfer.Finally,taking fiscal institutional reform as a turning point,we should consider the the promotion of the matching between fiscal reform and other reforms,including talents policies,industrial structure,economic opening and spatial planning.The fiscal reform and other reforms should be linked,coordinated and promoted,which is purpose to provide a good environment for regional innovation-driven development.