Study On The Local Government Financial Competition In The Flowing Factors Situation

In western federal countries, sub-national governments have their own fiscal jurisdiction and expenditure responsibilities, reduction in marginal effective tax rate in order to attract in inhabitants, business and capital is an important economic policy strategy to boost local development, and sub-national tax competition coming from this has long been a problem to which fiscal scholars pay much more attentions on. And in our country, before the Reform and Opening-up, the fiscal management has always been a deeply centralized one, in which sub-national governments have no their own fiscal interest, and there have not transverse competition , even length wise competition is very week. Along with the process of fiscal decentralization and the tax-divided system, local governments had certain informal discretionary powers in collecting fiscal revenue .But because in our method of transition economy, local finance is a little week; finance competition of China had some good effect and bad effect for economy. How to acknowledge, evaluate and regulate the tax competition in our finance competition of local governments is an important problem.Based on the research of intergovernmental competition in Spatial Economic Theory, this paper uses the method of spatial economic analysis, establishes flowing factors as a focal point, and studies the relationship between local governmental competition and agglutinative factors. The full text is divided into six chapters. The first chapter is the introduction, it analyzes the topics background, purpose and significance, and summarizes the relevant literature, and highlights the research value. Chapter 2 is the analysis of local governmental competition, which laying a foundation for follow-up research. Chapter 3 uses the tow-area-model to study the effect between the local governmental competition and the flow of factors. Chapter 4 uses capital-model and labor-model to analyze the effect between the local governmental competition and different flow of factors. Chapter 5 is the empirical research, which is an attestation of the theory. Chapter 6 is the conclusions and outlook, sorts out and reiterates the results and conclusions of this study, and prospects the follow-up research.This paper focus on relationship between the local finacial competitions and the flow of factors.In this paper we use the spatial analysis tostudy the problem,and use the spatial econometrics model to study the relationship between the local finacial competitions and the flow of factors of our country, which is the innovation point of this paper.Through the reseach we found that temperate competition is benefit for both the aere to attract the flowing factors and aere economic increasing.But the government use the revenue derateed only for attracted flowing factors which is bad for the aere economic increasing.