A Study On The Relationship Between Local Government Expenditure Competition And Industrial Structure Upgrading In China

With the deepening of China's fiscal decentralization system,the local government expenditure competition gradually replaced the tax competition as the main way of our government competition.Although the expenditure competition between local governments can improve the supply efficiency of public goods and services,attract the influx of production factors and promote the growth of regional economy.However,in the context of double incentive for capital and performance,Non-standard strategic competition behavior led to the emergence of regional industrial selection to follow,which is harmful to the rationalization and heightening of industrial structure,and hinder the healthy and coordinated development of the economy.Based on the theory of fiscal decentralization,factor flow theory and scale competition theory,this paper summarizes the formation mechanism of local government expenditure competition,introduces the inter-governmental strategy interaction into expenditure competition,and analyzes the impact path of various expenditure competition on industrial structure upgrade.On the basis of theoretical analysis,this paper chooses the provincial panel data from 2007 to 2015,and makes an empirical analysis of the existence of local government expenditure competition and its industrial structure effect by establishing the space Durbin model.The following conclusions:(1)The real sense of local government spending competition occur after taxation system reform.And it derives from the capital's fighting and meeting the higher level of government assessment.(2)The local government expenditure competition shows the characteristics of complementary strategies.In other words,local government spending in space has imitation effect,and is particularly evident in economic expenditure.(3)The competition of local government expenditure has a significant effect on the upgrading of industrial structure.Competition with different types of expenditure has different effects on the upgrading of industrial structure.The strategic competition of science and technology expenditure can greatly promote the upgrading of industrial structure,However,economic construction expenditure competition will limit the upgrading of industrial structure;While competition in administrative and social security expenditure have no effect.Based on the above conclusions,this paper puts forward some policy suggestions to optimize the competition of local government expenditure:(1)Deepen the reform of fiscal decentralization and speed up the transformation of government functions;(2)Improve official promotion system,and eliminate barriers to population movement;(3)Focus on the spatial effects of expenditure and optimize the structure of local expenditure.