Fiscal Decentralization, Marketization And Financial Decentralization

Xi Jinping pointed out that finance is the foundation and important pillar of state governance,and finance is an important core competitiveness of the country.Finance and finance are the two pillars of the steady development of the modern economy,whose development have always been the common concern of the whole society.In recent years,the financial and financial system reform have become the direction and focus of comprehensive reform,whose achievements have been obvious to all.At the same time,the question of how to reasonably divide the central and local powers in the financial and financial fields has been unresolved.After several years of the tax-sharing system reform,the central government has been greatly sufficiency,the proportion of local government's fiscal revenue to the total fiscal revenue has been declining year by year,while the expenditure responsibility has been pushed down to local governments,resulting in the inversion of central and local fiscal revenues and expenditures.The serious phenomenon has directly increased the financial pressure of local governments,especially the grassroots government.In response to the pressure on fiscal pressure and performance appraisal,local governments begin to seek financing support and attracting investment in the financial sector,which in turn affected the structural changes in the financial sector.From this perspective,the fiscal decentralization structure affects the financial decentralization structure.It is a pity that there are few existing research literatures on the relationship between financial decentralization and fiscal decentralization.Therefore,this paper integrates fiscal decentralization and financial decentralization into the same theoretical framework system to study whether fiscal decentralization has a significant impact on financial decentralization,thus enriching the literature on fiscal decentralization and financial decentralization.At the same time,market-oriented reforms are still in a tough period.Based on the universal connection of economic relations,market-oriented reforms may have an impact on fiscal decentralization and financial decentralization.In recent years,with the advancement of market-oriented reforms,private forces have also entered the power distribution competition between the central and local governments.Changes in the power structure in the fiscal sector may affect the power structure in the financial sector,which market-oriented reforms may affect.This makes the distribution of power between the market,the central government,and the local government always in a dynamic optimization.Therefore,this paper also introduces the interaction between market-oriented reform and fiscal decentralization in the model,which is intended to study whether the impact of fiscal decentralization on financial decentralization will be affected by market-oriented reforms.Firstly,this paper explains the two core vocabulary of fiscal decentralization and financial decentralization,introduces the evolution of the financial and financial system since the founding of New China and summarizes the structural characteristics of fiscal and financial power at each stage,which Provides factual basis for empirical research.Then,it explains the theoretical mechanism of fiscal decentralization and degree of marketization to financial decentralization,which lays a theoretical foundation for the empirical research.Then,it introduces model settings,variable descriptions and data sources as well as descriptive statistics and correlation analysis between variables,which provides data support for empirical regression.Then,based on the provincial panel data for 8 consecutive years from 2008 to 2015,and the control of the variables of marketization,real GDP per capita,and the proportion of deposits in each province,this paper uses a two-way fixed effect model to conduct benchmark regression analysis and sub-division regression to study whether the specific impact of fiscal decentralization on financial decentralization and its impact will be affected by the ongoing market-oriented reforms.Finally,a robustness test is performed.In order to test the robustness of the benchmark regression results,the core explanatory variables are replaced for further robustness tests.Specifically,the loan weighting index of the financial decentralization variable is replaced by the proportion index of the local financial institution practitioners.The fiscal decentralization variable is replaced by the first-order lag variable and it is no longer measured by the fiscal degree of freedom index,but by income index and expenditure index.The result shows that the benchmark regression result has passed the robustness test.The result is that the variables have certain stability.The study finds that fiscal decentralization and marketization have important explanatory effects on financial decentralization and that market-oriented reforms will weaken the positive effect of fiscal decentralization on financial decentralization.Then it summarizes the research conclusions of this paper.On this basis,it provides reference for policy recommendations for comprehensively deepening fiscal system reform,financial system reform and further promoting market-oriented reforms to provide theoretical guidance for preventing financial risks,maintaining financial security and ensuring regional economic stability.Finally,it points out the shortcomings of this paper and the possible research directions in the future.