Research on the Heterogeneous Impact of Local Fiscal Pressure on Urban Productivity: Based on the Background of New-type Urbanization

Abstract

Under the background of new-type urbanization and economic structure transformation, the fiscal pressure of local governments in China is increasing constantly, and how this will affect urban productivity needs further study. This paper holds that as the cumulative result of reform and opening policies and“physical urbanization”, the profound remodeling of economic geography will release the effect of urban heterogeneity on production efficiency in different dimensions with the increase of local fiscal pressure after entering the stage of“human urbanization”. From this angle, we can see the concrete manifestation of the contradiction of unbalanced and inadequate development in the new era. Based on the“scale-density-distance” dimensional urban heterogeneity analysis with local governments’ behavior and the panel data of cities above the prefectural level from 2003 to 2018, this paper studies whether the impact of local fiscal pressure on urban productivity will be differentiated by the difference of three types of urban attributes. The study finds that: First, from a national perspective, local fiscal pressure has a significant negative impact on urban productivity, and the contribution of three dimensions of urban heterogeneity to production efficiency is generally inhibited. When other variables remain unchanged, the urban productivity decreases by about 1.0667 units for every unit increase in the gap of local governments’ fiscal revenue and expenditure. Second, from the perspective of attribute characteristics of city types, large cities, cities with functional structure support and high production density, coastal cities and cities with high marketization degree have relatively strong ability to resist local fiscal risks. Third, in terms of influence mechanism and path, the heterogeneity of cities will prompt local governments to take different behaviors to deal with fiscal pressure. Due to the particularity of land resources, the strategy of relying on land finance to support fiscal revenue growth is no longer applicable, and coping with fiscal pressure by adjusting fiscal expenditure structure will gradually become a feasible choice.The above conclusions indicate that, as a risk factor, the increase of local fiscal pressure will not only have a negative impact on urban productivity, but also weaken the efficiency contribution of the existing heterogeneity advantages of cities through the adjustment of fiscal expenditure structure by local governments, resulting in the artificial distortion of resource allocation and restricting the long-term sustainable growth of cities. This paper verifies the conclusion that the increase of local fiscal pressure will lead to urban productivity differentiation under the background of new-type urbanization, which has enlightening significance for identifying the heterogeneous factors that affect and restrict urban productivity, guiding and improving the quality of urban development by classification, increasing the institutional innovation of optimal allocation of resources, and promoting the smooth transformation of urbanization and regional coordinated development.