Spatial Econometric Analysis On Government Spending And Economic Growth In Chinese Provinces Area

With the gradual deepening of financial reform, especially the tax system reform, China's provincial-level local governments have a relatively independent finance, there was greater difference in local government fiscal policy. However, due to tax system flaws, the tax revenue distribution between central and local governments is not reasonable, leading to local economic and social aspects of a number of development goals and their own local interests, because of fiscal different result also appeared to enjoy the public services quite different in the provincial-level regions.At present, the main characteristics of investment-led economic growth, the local governments have excessive investment impulse, which often leads to local government revenue deficit. Unbalanced regional development and the growing gap between local financial resources is an important issue in China. In that case, whether there is convergence between the provincial regional economic growth and fiscal expenditure? Whether there was a link between different regions'fiscal expenditure? How is the relationship between government expenditure and economic growth if the Neighbor Competitive Effects added? These studies, for China to deepen local financial system, and promote coordinated development of various regions and narrow the urban-rural gap and the gap between rich and poor, to achieve sustained economic development has certain significance.In this paper, Use per-capita indicators and Spatial Econometric Analysis to do econometric analysis between the Provincial local economic growth and fiscal expenditure of provincial governments, and discuss the convergence of the two. Next, we use the Spatial Lag Model and Spatial Error Model to do econometric analysis. Then we compare the results with that from ordinary least squares (OLS) regression analysis.