Financial Decentralization And The Ratio Of Investment To Consumption

In recent decades,the coexistence of high investment and low consumption is a prominent phenomenon in China's macroeconomic development.The main content of China's economic decentralization is fiscal decentralization and financial decentralization.Since the reform of the tax sharing system in 1994,China's mature fiscal decentralization system has basically taken shape.A large number of scholars have conducted in-depth research on related fields,and China's financial decentralization system is still in the stage of formation.The background of fiscal decentralization is the reason for the emergence of financial decentralization.Financial decentralization has an impact on investment and consumption.In the future,the influence of financial decentralization on macroeconomics will increase.The influence of financial decentralization on investment and consumption ratio has practical significance.This article elaborates on this issue from two aspects:theoretical analysis and empirical research.First of all,at the theoretical level,this paper defines the concept of financial decentralization and sorts out the evolution process of China's financial decentralization,and then analyzes the indirect effect mechanism of financial decentralization on the ratio of investment to consumption.Secondly,at an empirical level,this paper uses provincial panel data from 1998 to 2014 in China to examine the nonlinear relationship between financial decentralization and the ratio of investment to consumption using financial decentralization as a threshold variable,then we use a variety of ways to verify the reliability of the panel threshold regression results.Finally,based on the foregoing theoretical and empirical analysis,we conclude that:(1)Under the different levels of financial decentralization,China's financial decentralization has different effects on the ratio of investment to consumption,which is characterized by the nonlinear characteristics of "double threshold effect".(2)The nonlinear relationship in the provinces is not the same form,in the provinces with low levels of financial decentralization,financial decentralization is positively related to the ratio of investment to consumption;in the provinces with middle levels of financial decentralization,the relationship between financial decentralization and the ratio of investment to consumption is uncertain;in the provinces with high levels of financial decentralization,financial decentralization is negatively related to the ratio of investment to consumption.(3)There is a "U"-shaped curve relationship between fiscal decentralization and the ratio of investment to consumption,and fiscal decentralization has a certain influence on the nonlinear relationship between financial decentralization and the ratio of investment to consumption.The combined effect of financial decentralization and fiscal decentralization has expanded the ratio of investment to consumption.(4)The number of provinces with high levels of financial decentralization in China is the least,and most of the provinces are still in the stage of middle and low financial decentralization.In order to reduce the ratio of investment to consumption,we should vigorously promote the financial decentralization process in the provinces with low or middle levels of financial decentralization.