Fiscal Decentralization, Local Government Competition And Corporate Technological Innovation Efficiency

With economic expansion having moderated to a "new normal" pace,the traditional model of economic growth has been unable to maintain the sustainable development of the society.We can break through the constraints of labor and other factors through the recombination of production factors by innovation.What's more,the original driving force for the development of technological innovation comes from the enterprises in the micro economy.But in reality,the positive externality and partial exclusiveness of innovation make it difficult to avoid the problem that the level of innovation input and output is lower than the best level of society if only relying on the single regulation of the market,therefore,government intervention in innovation activities is very necessary.In view of this,the Chinese government has continuously raised the importance of innovation,and in recent years has also introduced many policies to guide innovation,these policies are widely integrated into science and Technology Policy,industrial policy,financial policy,trade policy and intellectual property protection policy system.Although the 2019 global innovation index shows that China's overall ranking has risen,compared with other countries,China still has problems such as low overall innovation level and uneven development.While fiscal decentralization has been a typical institutional feature in China in recent years,which has fundamentally changed the incentive structure between the central government and local governments,as well as the way local governments participate in social and economic activities,governments at all levels play an increasingly important role in the whole vertical government hierarchy.So as an important part of economic activities,whether the technological innovation of enterprises will be affected by fiscal decentralization? The second-generation fiscal decentralization theory holds that under the fiscal decentralization system,local governments are likely to generate strong competitive incentives in order to maximize their own interests.Not only that,but the central government's direct review and appointment of local government officials has also intensified competition for political advancement.In this case,on the one hand,local governments tend to favor low cost,high return,low risk infrastructure projects in order to move up the ladder as quickly as possible,this "competition for growth" behavior is likely to have a negative impact on enterprise science and technology innovation.On the other hand,with the inclusion of science and technology innovation indicators in the promotion assessment system and some rigid requirements for science and technology innovation activities put forward by the central government,local governments are also gradually competing around innovation,to form a competition mode of "competition for innovation",which will probably have a favorable influence on enterprises' science and technology innovation activities.So under the dual background of fiscal decentralization and innovation-driven development strategy,how does fiscal decentralization affect enterprise scientific and technological innovation? Will "competition for innovation" and "competition for growth" have a significant impact on enterprise scientific and technological innovation? Thinking about these problems is great significance to improve China's financial system and promote the building of an innovative country.Based on the comprehensive panel data of 306 enterprises in 30 provinces from 2012 to 2017,this paper uses the multi-intermediary model to test the mediating effect of local government competition.In addition,this paper considers that the innovation efficiency of enterprises is not only affected by the external environment,but also affected by the internal conditions of enterprises.Therefore,this paper discusses the heterogeneity of the effect of local government competition to innovation efficiency of enterprises in different stages of life cycle.It is found that fiscal decentralization can promote both "competition for growth" and "competition for innovation",and that fiscal decentralization can affect the efficiency of enterprise scientific and technological innovation by promoting local governments to "competition for innovation",and this is a beneficial effect;fiscal decentralization can affect firms' innovation efficiency through local governments' "competition for Growth",and this is a detrimental effect;The influence of local government competition on the efficiency of technological innovation is heterogeneous,especially on the enterprises in the growing and mature period.