Study On Economic Impacts Of Competition Among Local Governments In Undertaking Industrial Transfer Of Western China

Industrial transfer is a kind of market behavior, of which the main body should be the enterprise; therefore, it can achieve efficient allocation of resources under the effect of market mechanism. However, Chinese market economy is dominated by the local governments who directly involve in the wave of industrial transfer as quasi-western market players. Bounded by resources of industrial transfer, it is inevitable to undertake industrial transfer competition among governments. Thus, the thesis will study the economic impacts of competition among local governments in undertaking industrial transfer of western China.Firstly, based on theory analysis, the thesis builds the complete information static game about competition among local governments in undertaking industrial transfer. And then, two hypotheses are proposed. They are:(1) competition of local governments reduces performance of economic growth in undertaking industrial transfer,(2) competition of local governments expands existing regional economic disparities in undertaking industrial transfer.Secondly, the thesis analyzes the current situation of competition among local governments in taking industrial transfer of western China. The central government’s assessment based on economic growth, western region’s preference about economic growth and industrial transfer’s important role in promoting economic growth lead to competition among local governments in taking industrial transfer of western China. At the present stage, the main strategies of competition among local governments are preferential policies for competition and public expenditure competition. The study suggests that competition among local governments is intensifying by analyzing tax and land price.Furthermore, the thesis studies the relationship between competition among local governments and performance of economic growth and the relationship between competition among local governments and economic disparities. In the study of competition among local governments and performance of economic in undertaking industrial transfer of western China, we analyze economic effects of each competitive strategy, and build a measurement model for empirical analysis. The results of empirical analysis demonstrate the research hypothesis 1. In the study of competition among local governments and economic disparities in undertaking industrial transfer of western China, we demonstrate the research hypothesis 2 by correlation analysis between difference of industrial transfer and difference of economic growth.Finally, this thesis suggests that the role of local government should be changed from competition to co-opetition in western industrial transfer. And then, local governments should come true co-opetition governance. The western region should carry on appropriate industries and take dislocation competition on the basis of comparative advantage, then form an effective division of labor and cooperation pattern to join economic development system of country. Meanwhile, local governments should strengthen cooperation among industrial projects, infrastructure construction, and space development, and enhance capacity of undertaking regional industrial transfer. All in all, local governments choose to cooperate is to obtain imaginary profit of economic, politic. Therefore, they need to build competitive mechanism about benefit sharing and distribution and compensation. So it is valuable and credible to ensure the cooperation between stakeholders.