Research On The Impact Of Local Tax Competition On Manufacturing Upgrade In Yangtze River Delta

As the foundation of national economic stability and development,manufacturing industry is also an important driving force to promote high-quality development of national economy.In the current complex economic background at home and abroad,the domestic economy needs to get long-term and stable development,so it is necessary to improve production efficiency and upgrade the manufacturing industry.As one of the regions with the strongest comprehensive strength in China,the Yangtze River Delta region gathers a large number of manufacturing enterprises and bears the heavy responsibility of accelerating and guiding the upgrading of manufacturing industry.Therefore,it is particularly important to promote the upgrading of manufacturing industry in the Yangtze River Delta region.After the tax sharing reform,local governments have partial discretion and can guide the flow of resources and investment direction through tax policies and other ways.Therefore,local governments guide local resources through tax competition,and then affect the upgrading of local manufacturing industry.Based on the data of 41 cities in the Yangtze River Delta region,this paper studies the impact of local tax competition on the upgrading of manufacturing industry from both theoretical and empirical perspectives.Theoretical analysis of the effect of local tax competition on manufacturing upgrading principle;Empirical level respectively through spatial econometric model and panel regression model proved the existence of local tax competition in Yangtze river delta and the influence of local tax competition upgrade of manufacturing,and according to the differences in the levels of economic development in Yangtze river delta,through further analysis of Yangtze river delta region threshold test model under different economic development level of local tax competition effect on the manufacturing industry upgrade.Through the above empirical analysis and draw a conclusion:the local tax competition in the Yangtze River Delta region on the upgrading of manufacturing industry has a inhibiting effect.Under different levels of economic development,the inhibiting effect of local tax competition on the upgrading of manufacturing industry in regions with higher economic development level is weakened to some extent.The reasons for these results might be due to:as the industry characteristics of manufacturing enterprises,local tax competition between regions will directly affect the enterprise’s cost,make originally not competitive low-end manufacturing enterprises get more profit,so the region of local tax competition will cause reflux low-end manufacturing,thus inhibiting manufacturing industry to upgrade.At the same time,the regional economic development level is relatively high,and the infrastructure and financial environment provided by the government can appropriately alleviate the transportation cost and financing problems of enterprises,which is conducive to weakening the inhibiting effect of local tax competition on the manufacturing industry.Finally,according to the above analysis,policy suggestions are put forward from three aspects:standardizing local government tax competition,constructing local government coordination mechanism and optimizing and perfecting relevant supporting measures.