The Impact Of Chinese Local Government's Fiscal Expenditure On Economic Growth

The government's leading role in the economy is one of the main reasons for China's economic development in the past 30 years since its reform and opening up.It is also one of the characteristics of China's economic development model that is different from the western mainstream economic theory.Since 2007,the US subprime mortgage crisis,the European sovereign debt crisis has erupted and swept the world,China's foreign trade import and export affected by the crisis,leading to the decline of economic growth rate.In order to reverse the unfavorable situation,the Chinese government launched a 4 trillion fiscal expenditure plan,trying to use investment instead of export-led economic growth,but this large-scale investment affected the market allocation mechanism for the funds,resulting in some industry serious overcapacity,Asset bubbles,etc.Therefore,learning the impact of local government financial expenditure on economic growth in the background of financial crisis,and as our next step to adjust the scale and structure of financial expenditure policy guidance,has a certain practical significance.Based on the summary and refinement of previous studies,this paper focuses on the realities of China and its eastern,central and western regions,and analyze the similarities and differences between the size and structure of fiscal expenditure between the whole and the three regions by the classical theory of local government's fiscal expenditure on economic growth.In this paper,we use the method of spatial measurement to analyze the impact of the local government's fiscal expenditure on economic growth by the data from 2007 to 2015 for new statistics,adding the opening degree to the C-D function.The results of this study show that:(1)There is a positive correlation between the scale of fiscal expenditure and the economic growth of the whole country and the east,middle and west in China.Among them,the output elasticity of the west is the smallest,because when compared to the other area,a greater portion of the fiscal spending is invested in nonproductive spending such as public administration and social security in western China.(2)The output elasticity of economic construction expenditure on the country's economic growth is very small,and only in the central and western play a positive role,indicating that economic construction expenditure in the poorer areas of the more effective;The expenditure on science,education,and culture and health has positive effects on the economic growth of the three regions and the whole country,espacially in the east.And the output elasticity of administrative expenditure and social security expenditure on the economic growth are not significant of the three regions and the whole country;(3)In the aspect of spatial correlation,the scale of local fiscal expenditure is negatively related to the economic growth of neighboring provinces,which reflects the fierce competition relationship between local governments in the economic field.In addition,the local science and education expenditure has positive externalities to the economic growth of neighboring provinces,And the most obvious in the eastern region,Because the dense and mobile eastern population led to a strong knowledge spillover effect.