A Study On The Impact Of Financial Decentralization On High-quality Economic Development

In recent years,with the further development of economic society,coupled with the deepening of the practice of reform and opening up,“Chinese-style decentralization” has been added many connotations.On the basis of fiscal,financial decentralization has gradually been brought into the category of Chinese-style decentralization.This institutional innovation has also brought new development space to China’s economic development.Regional competition caused by the financial decentralization can through stimulation of the local government to improve infrastructure construction,the introduction of foreign direct investment,increase investment in science and technology innovation and human capital investment,increase the degree of opening to the outside world,accelerate the process of cleaner production,balance social way to optimize the distribution of local resources,such as the gap between rich and poor,in turn,promote the development of economy,high quality.On the other hand,due to the “GDP management” mechanism and the“promotion tournament” between local governments,financial decentralization is likely to bring about “competition for second place”,which will hinder high-quality economic development.In view of this,the impact of financial decentralization on high-quality economic development is uncertain.Therefore,this thesis integrates financial decentralization and high-quality economic development into the same model,explores the temporal and spatial correlation between the two,and puts forward policy suggestions for high-quality economic development in China.On the basis of combing existing literature on the relationship between financial decentralization and high-quality economic development and analyzing relevant theories,this thesis further analyzes the status quo of financial decentralization in China and the development process since the founding of new China.On the basis of the traditional “Five development concepts” of high-quality economic development,two dimensions of efficiency and stability are creatively added,and 27 representative secondary indicators are selected to construct comprehensive index of high-quality economic development of 30 provinces and cities in China from 2008 to 2019 by means of entropy method.Then analyzes the changes and regional differences of the comprehensive index of China’s high-quality economic development in the report period,and preliminary judges the influence relationship between the level of financial decentralization and the status of the indicators of China’s high-quality economic development.Third,this thesis uses the panel data of 30 provinces,province-level municipalities and autonomous regions in our country from 2008 to2019,to analyze the financial decentralization effect on our country’s economy to develop high quality comprehensive index system.Considering the differences of various regions in China,this thesis also carries out regional regression.At the same time,taking fiscal decentralization as the regulatory variable,this thesis constructs the regulatory effect model.In order to explore the most suitable level of financial decentralization,a panel threshold model is established with financial decentralization as the threshold variable.The results of this thesis show that: first,explicit financial decentralization has a significant positive impact on high-quality economic development,coordination,green,openness and sharing.Implicit financial decentralization has a positive impact on high-quality economic development,innovation,green,open and stable development.Second,the impact of financial decentralization on high-quality economic development has regional differences.Financial explicit decentralization promotes the high-quality economic development of the western region,but inhibits the high-quality economic development of the eastern region.Financial implicit decentralization promotes the high-quality economic development of the central and western regions,which has no significant significance in the eastern region.Third,at the national level and in the eastern region,fiscal decentralization weakens the role of financial explicit decentralization in high-quality economic development.In the central region,fiscal decentralization strengthens the role of financial explicit decentralization in high-quality economic development,while in the western region,this regulatory effect does not exist.Then,only in the eastern region,fiscal decentralization weakens the role of financial implicit decentralization in promoting high-quality economic development,while in other regions,this regulatory effect does not appear.Fourth,at the national level and the eastern region,the test results with explicit financial decentralization as the threshold variable have a single threshold effect.At the national level,before and after the threshold,the impact of explicit financial decentralization on high-quality economic development changes from positive to negative.In the eastern region,before and after the threshold,the impact of financial explicit decentralization on high-quality economic development also changes from positive to negative,and the negative effect is less than the positive incentive before and after the threshold.Therefore,this thesis puts forward the following suggestions: Firstly,determine the level of local financial decentralization according to local conditions and be suitable for the fiscal decentralization system,in order to form a good linkage effect between fiscal decentralization and financial decentralization.Secondly,we should optimize the assessment mechanism of local governments and establish a more diversified performance assessment mechanism based on high-quality economic development.Thirdly,we should grasp the periodical influence of financial decentralization on the high-quality development of China’s economy and adjust the level of financial decentralization appropriately according to economic development.This thesis has 16 diagrams,24 tables and 122 references.