Government Fiscal Expenditure Research Articles

Do government fiscal expenditure and financial institutions promote high-tech industry development? Evidence from China

ABSTRACT With economic globalization and the rapid progress of economic transformation, developing high-tech industries has become an important way for many emerging countries to achieve sustainable and environmentally friendly economic development category. This research uses the vector error correction model (VECM) to study the effect of fiscal expenditures and financial support on China’s high-tech industry development during 2001–2022. The results show that government fiscal expenditure has a long-term and stable positive relationship with the output of high-tech industries and the number of new high-tech enterprises, while current loans from financial institutions have a negative relationship with such development. Moreover, fiscal expenditure has a greater and deeper impact on high-tech industries than does the loans of financial institutions. In terms of policy insights, our results imply that the government should continue to improve fiscal expenditure and promote financial innovation to help achieve sustainable and balanced development of high-tech industries.

정부 재정지출이 자급률에 미치는 영향 분석

In Korea, the food self-sufficiency rate is one of the most important political issue. The Korean government puts a large budget into increasing the food self-sufficiency rate every year but the performance of the government's efforts is still controversial. The purpose of this study is to analyze the impact of government fiscal expenditure on the self-sufficiency rate. In this paper, market changes were measured using Equilibrium Displacement Model(EDM). The changes in the self-sufficiency rate and social welfare were also measured using changes in market equilibrium. As a result of the analyses, as government fiscal expenditure increased, the food self-sufficiency rate and social welfare increased, contributing to food security in Korea. Among government fiscal expenditures, increasing proportion of government fiscal expenditure on consumption showed a more positive effect on all markets than increasing proportion of government fiscal expenditure on other types. Therefore, it is necessary to expand policies to increase domestic consumption. The results of this study can be useful to discuss about the more efficient management of government fiscal expenditure for the agricultural sector.

Is renewable energy technology innovation an excellent strategy for reducing climate risk? The case of China

In this era of global warming the importance of climate risk cannot be understated, and finding ways to reduce climate risk is a topic worthy of study. In this paper, we innovatively examine the role of renewable energy technology innovation on climate risk in China. In addition to their linear relationship, we also investigate the asymmetric and heterogeneous impact, detect the impact channels, and find that (1) increased renewable energy technology innovation can effectively alleviate the climate risk situation. Accordingly, the development of renewable energy technology innovation can make a significant contribution to CR abatement. (2) Pronounced impacts of renewable energy technology innovation on climate risk can be observed in the higher quantiles (75th and 90th) of climate risk. (3) Renewable energy technology innovation is a powerful weapon for eradicating climate risk in provinces with a higher level of government fiscal expenditure. And (4) renewable energy technology innovation has an impact on climate risk by facilitating energy consumption efficiency, which is a necessary mediator. These conclusions inspire us to put forward several corresponding policy implications for better climate risk governance and renewable energy technology innovation development.

정부 시장격리가 쌀 수급에 미치는 사후영향평가

The purpose of this study is to analyze the effect of the government's implementation of the market isolation system related to the Grain Management Act on rice supply and demand and price and the government's fiscal expenditure. To achieve this purpose it was modeled with a structural equation system that reflects the causal relationship between economic variables that conforms to economic theory. In particular, the rice policy analysis model constructed in this study is a ex-post policy assessment model, and the analysis of the impact of government policy changes on the rices in harvest period and lean season before the next harvest by reflecting the price formation process by period in the model is different from previous studies. As a result of the analysis, the market isolation system was found to be effective in raising the selling price of farm households in line with the government's policy purpose. However, it was found that the government's fiscal expenditure increased due to the increase in rice purchase and management cost because of the increase in inventory. Furthermore it was analyzed that the government’s fiscal expenditure efficiency was reduced as the benefit-cost ratio of market isolation implementation was all less than 1. Since 2005, the government has operated a direct payment system and the target price has existed, so there are many limitations to positively evaluate the additional market isolation system. In the future, if the government’s market isolation policy is needed due to rapid price change, it is considered that in-depth research on inventory management and release plans will be needed to increase government fiscal efficiency.

The Economic Impact of Aging on Chinas Public Health: A Short-term Perspective

In today's world, the aging of the population is an absolute trend. The aging of the population is the result of the improvement of the medical level, the decline of the birth rate and the extension of the life expectancy. China is experiencing the largest and fastest population aging process in the world. Population aging has brought huge challenges to the stable operation of China's medical insurance system and put pressure on the Chinese government's fiscal expenditure. This paper constructs a VAR model on population aging, medical insurance expenditure and GDP growth, find that past data have shown that GDP growth and medical insurance expenditure have adverse reactions to the intensification of population aging. In the prediction of the future, the further deepening of population aging will bring challenges to China's economic growth and government finance. Chinese government should adjust the policy on medical insurance expenditure to solve the problem caused by deeper aging, to promote the sustainable development of China's medical insurance.

Does Green Finance Expand China’s Green Development Space? Evidence from the Ecological Environment Improvement Perspective

It is important to explore the intrinsic mechanism of green finance’s role in widening the green development space for China, in order to optimize the structure of green financial development and accelerate the construction of a modernized economic system. Taking ecological environment improvement as a new research perspective, this paper presents the impacts and mechanisms of green finance on the green development space of the economy and society through the fixed-effect model and moderating-effect model, based on panel data from 30 provinces and municipalities in China from 2011 to 2020. The findings show that green finance development in China significantly expands the green development space of the economy and society, and this conclusion did not change after robustness tests such as replacing the main variables, adjusting the study interval, and considering endogeneity. In terms of its mechanism of action, ecological environment improvement plays an important mediating and regulating role in the process of green finance, essentially magnifying the green development space of the economy and society. In terms of a heterogeneity analysis, the effect of green finance on the expansion of the green development space is the largest in the eastern region, followed by the northeastern region, and the smallest in the central and western regions. In addition, the positive effect of green finance is relatively larger in regions with a higher urbanization level, government fiscal expenditure level, foreign investment level, and advanced industrial structure. The main contribution of this paper is to the field of green development, revealing the important role of the ecological benefits of green finance, which can help to achieve high-quality sustainable development in the economy and society.

The Impact of Green Finance on Upgrading the Manufacturing Industry of the Yangtze River Economic Belt Based on the Spatial Econometric Model

China’s economic development has made world-renowned achievements which have subsequently brought serious environmental pollution problems. As a large manufacturing country, the industrial value added in China accounts for nearly 30% of the global share. However, the manufacturing industry lacks competence. Therefore, considering environmental protection issues while promoting manufacturing industry upgrading (MIU) is a critical goal for China at present. By applying panel data from China’s Yangtze River Economic Belt (YREB) from 2010 to 2019, this paper uses a spatial econometric model to study the effect of green finance (GF) on upgrading (hereafter, upgrading refers to the improvement of the manufacturing structure and the transition toward green manufacturing) the manufacturing industry. This study found that the impact of GF on MIU in the YREB is significantly positive. GF has a good positive spatial spillover effect. Moreover, the high level of urbanization and high freight volume have positive impacts, the impacts of foreign investment and government fiscal expenditure are significantly negative, and the effect of the level of human capital on upgrading is not obvious. Therefore, vigorously developing green finance, optimizing the environment for manufacturing upgrades, and cultivating green and high-quality talents should be the future direction of government policy formulation.

Fiscal support and carbon productivity of agriculture—Empirical evidence from China

In the context of global climate change, improving agricultural carbon productivity is an important channel to cope with climate change, reduce agricultural carbon emissions and maintain agricultural growth. For a long time, agricultural development in China mainly depends on the government's fiscal expenditure. However, does fiscal support helps to promote carbon productivity of agriculture? This question remains to be answered. Using a set of panel data covering 31 provinces and cities from 2003 to 2019, this study empirically explores the impact of agricultural fiscal support on agricultural carbon productivity in China. Benchmark regression results indicate that after controlling other influential factors, regional fiscal expenditure on agricultural has a significantly positive impact on agricultural carbon productivity. In addition, the promotion impacts of fiscal support on agricultural technological innovation and scale operation efficiency are two effective channels by which to help promote agricultural carbon productivity. By using a panel threshold regression model, we find that there exists a nonlinear relationship between fiscal support and agricultural carbon productivity. The input of agricultural machinery and chemical fertilizer are two threshold variables. Further, this causal linkage between fiscal support and agricultural carbon productivity exists differences because of the different levels of agricultural carbon productivity and regions. Our research provides Chinese theoretical basis and practical reference for improvement of agricultural carbon productivity from the perspective of fiscal expenditure.

Has China's OFDI promoted the upgrading of manufacturing structure-- Research based on interprovincial panel model

With the take off of the Chinese economy, more and more enterprises are investing resources in OFDI, and OFDI and its related economic factors have also had a certain impact on the upgrading of the manufacturing industry. This article studies panel models of 31 provinces in China from 2014 to 2019 using relevant data sources such as the National Bureau of Statistics and the Guotai An Database, and explores the impact of OFDI and its related economic factors on the manufacturing structure. Research has found that OFDI and international trade factors can significantly inhibit the upgrading of manufacturing structure; The per capita income level will have a positive impact on the upgrading of the manufacturing industry structure; The impact of FDI and government fiscal expenditure on the upgrading of manufacturing structure is not significant. In view of the above research results, this paper suggests that the government should adopt appropriate policies to guide OFDI in the manufacturing industry, encourage it to focus on technology intensive or capital intensive industry, and avoid its negative impact leading to "hollowing out" of the manufacturing industry; Enterprises should also optimize their business structure, relocate unnecessary or outdated businesses, invest their main resources in local businesses, and focus on technological upgrades to avoid the adverse effects of OFDI.

Impact of China’s Local Government Competition and Environmental Regulation on Total Factor Productivity

In the transition of China’s economy toward high-quality development, it will be increasingly important to coordinate the relationship between local government competition, environmental regulation, and the transformation of the economic growth mode. To explore the impact of local government competition and environmental regulation on total factor productivity (TFP), in this study empirical analysis models were established using panel data of 30 provinces in China from 2001 to 2017. Local government competition was measured from the perspectives of foreign direct investment (FDI), fiscal expenditure, and tax. The results show that local government competition has a positive impact on the improvement in TFP. Taking environmental regulation into consideration, the impact of local government competition on TFP is weakened. Furthermore, under the current intensity of environmental regulation, local government fiscal expenditure competition and tax competition both lead to improvement in TFP, while FDI competition has the opposite effect. This paper explores the heterogeneity of the impact of local government competition and environmental regulation on TFP under different local government competition levels. Under the influence of environmental regulations, local government FDI competition has a negative impact on the improvement in TFP, particularly in “low” FDI competition areas. Local government fiscal expenditure competition has a positive impact on the improvement in TFP, particularly in “low” fiscal expenditure competition areas. The current level of local government tax competition has a negative impact on the improvement in TFP in “high” tax competition areas, whereas it has a positive impact on the improvement in TFP in “low” tax competition areas.

Can anti-corruption induce green technology innovation? Evidence from a quasi-natural experiment of China.

Green technology innovation shoulders the dual task of green development and innovation leading. It is an inevitable choice for China to achieve the carbon peak and neutrality goal and promote high-quality economic development by effectively stimulating green innovation vitality and improving green innovation capacity. In this context, from the perspective of institutional quality, this study takes the anti-corruption campaign launched since the 18th National Congress of the Chinese Communist Party as a quasi-natural experiment, constructs an intensity difference-in-differences (DID) model, and tests the impact effect and mechanism of the anti-corruption campaign on regional green technology innovation. It is found that the anti-corruption campaign has significantly improved the level of regional green technology innovation. This conclusion still holds after a series of robustness tests such as parallel trend test, placebo test, and instrumental variable estimation. The results of mechanism analysis show that the anti-corruption campaign is helpful to increase foreign direct investment and change the government's fiscal expenditure bias, thus promoting the improvement of green technology innovation level. Heterogeneity analysis shows that the promotion effect of anti-corruption campaign on green technology innovation is more significant in eastern and southern regions. At the same time, the lower the degree of government intervention, the greater the protection of intellectual property rights, and the stronger the environmental governance, the greater the promoting effect of the anti-corruption campaign on green technology innovation. Further research shows that the improvement of the level of green technology innovation is conducive to the realization of the "dual control" goal of total and intensity of carbon emissions. This study proves the positive externality of anti-corruption campaign from the perspective of green technology innovation and provides new empirical evidence for the advantageous theory of anti-corruption.

The Spatial Spillover Effects of Fiscal Expenditures and Household Characteristics on Household Consumption Spending: Evidence from Taiwan

The main purpose of this study is to explore the determinants of average household consumption spending in counties and cities from the two aspects of government fiscal expenditure and household characteristics. A spatial econometric model, the spatial Durbin model, was used to analyze Taiwan’s county-level and municipal panel data from 2000 to 2020. Global spatial autocorrelation and local spatial autocorrelation were applied to examine the overall degree of spatial agglomeration of average household consumption spending in Taiwan and the agglomeration status of specific counties and cities. The empirical results show that the average consumption spending per household of all counties and cities in Taiwan presents spatial autocorrelation, and the agglomeration of specific counties and cities is affected by different ruling parties of the central government. In terms of direct effects, the average consumption spending per household in local counties and cities is influenced by household characteristics, including average disposable income per household, average number of employees per household, and average living area per capita. In terms of the spatial spillover effect, the average consumption spending per household in local counties and cities is influenced by household characteristics of the neighboring counties and cities, including the average disposable income per household and the average living area per capita. Surprisingly, local economic development expenditure and local expenditure on education, science, and culture have no significant impact on the average consumption spending per household in counties and cities. The results of this study can be taken as a reference for government policymaking.

Spatiotemporal characteristics and influencing factors of agricultural low-carbon economic efficiency in china

Developing low-carbon agriculture can effectively avoid the waste of natural resources, thus contributing to the long-term sustainability of agriculture. This study uses the Super-SBM model to measure agricultural low-carbon economic efficiency (ALEE) in China from 2000 to 2018, then analyzes the spatial-temporal evolution characteristics. Simultaneously, the influencing factors of ALEE are investigated using spatial econometric model. The results show that: (1) In terms of temporal evolution, the ALEE in most provinces is declined over time, with only a few provinces improving. The ALEE in China and the three regions all show an obvious “L” trend of decline first and then stability. (2) From the perspective of spatial differentiation, provinces in eastern region have higher ALEE, while those in central and western regions have lower ALEE. Hainan’s ALEE has an absolute advantage, while Shanxi is the worst. (3) China’s ALEE shows obvious spatial agglomeration characteristics of H-H and L-L agglomeration, which are further enhanced over time. The number of L-L agglomeration provinces gradually increases, indicating that China’s ALEE has not been improved significantly. (4) Economic growth level and Agricultural scientific and Technological progress have effectively improved the ALEE. However, Capital deepening, Government fiscal expenditure, Agricultural planting structure, and Agricultural disaster all have negative impacts. Rural electricity consumption also has a negative impact, but the impact is not significant. To accelerate the development of low-carbon agriculture, all regions must not only pursue a differentiated low-carbon agriculture development path, but also accelerate agricultural transformation, strengthen research and development, and popularize low-carbon agricultural technologies, reduce the input of traditional agricultural means of production, optimize the agricultural industrial structure, and adjust agricultural subsidy policies.

Efficiency of China's urban development under carbon emission constraints: A city-level analysis

This study explores the efficiency of China's urban development under carbon emission constraint from 1996 to 2017. Firstly, it uses the Defense Meteorological Satellite Program's Operational Linescan System (DMSP-OLS) and Suomi National Polar-Orbiting Partnership Visible Infrared Imaging Radiometer Suite (NPP-VIIRS) nightlight imaging to evaluate the carbon dioxide emission levels of 249 cities in China. Then, it utilises the epsilon-based measure (EBM) superefficiency model and Global Malmquist–Luenberger (GML) index to evaluate the urbanization efficiency and changes in the total factor productivity (TFP) of urban development of the 249 cities under carbon emission constraints. Results show that from 1996 to 2017, the total carbon emissions of the 249 cities grew during a rapid development stage, while the efficiency of urban development under carbon emission constraints showed fluctuation and did not increase significantly. The redundant improvement values of government fiscal expenditure, urban employees, urban fixed asset investment, foreign direct investment, and carbon emission increased in fluctuations. From the regional spatial perspective, the urbanization efficiency of western China was the highest, followed by the northeast region, the central region, and finally the eastern region. In addition, the driving factors of TFP of urbanization in China have improved as a whole. The application of nightlight imaging data and EBM superefficiency model improves the accuracy of urban development efficiency measurement. The findings of this study can provide a scientific basis for different regions and cities of different sizes to formulate carbon emission reduction strategies, and have important policy value for improving urban development efficiency in China. In addition, the research of index system should be deepened to further improve the measurement accuracy.

Government Expenditure Fiscal Delegation and Environmental Quality: A Study of Nigeria

The delegation of government fiscal expenditure is a significant avenue via which the required environmental quality is intended to be accomplished. Climate change is a big worry across the world. Every government is putting forth enormous effort to handle the problem in order to keep human occupancy across the globe. It is not out of place for the government to prudently allocate the necessary resources to Nigeria's three levels of government in order to maintain the environment. The government budget is the primary tool for capturing this expenditure obligation and enabling governments at all levels to bear it successfully. As a result, this study investigates the effectiveness of the three levels of government's fiscal obligations in reducing CO2 emissions in Nigeria. The study spans the years 2005 through 2020, with data analyzed utilizing numerous regression techniques and correlation. According to the data, state fiscal expenditure has a minor destructive impression on haze secretion management, however local government has a large deleterious bearing with smoke decline. On the other hand, federal government budgetary expenditure has a considerable and favorable influence on CO2 emission control. As a result, increased government resources are required to address the environmental pollution challenge. According to the report, all levels of government should invest heavily in green technologies in order to attain pollution-free living conditions. Fiscal spending delegation should apply pollution control adoption costs necessary for biodiversity conservation.

Does China’s green economic recovery generate a spatial convergence trend: an explanation using agglomeration effects and fiscal instruments

China’s urbanization process has entered a period of rapid development, and cities have become key to driving regional economic development. This paper uses data from 286 cities in China in the period 2005–2018 to construct an urban economic growth quality index system and examine the influence of spatial factors on the convergence trend of China’s urban economic growth quality. It is found that there is a β absolute convergence trend of economic growth quality in Chinese cities across the whole country. After controlling for the initial conditions of individual economies, spatial factors strengthen the spatial convergence trend of urban economic growth quality and significantly increase the corresponding convergence rate. Among the areas studied, the western region has the fastest convergence rate, followed by the central and eastern regions, and the convergence rates of both the central and western regions are higher than the national average. Agglomeration economies and fiscal policy tools are important for the promotion of the urban economic growth quality. The agglomeration of productive service industries significantly improves the spatial convergence rate of urban economic growth quality. This effect is mainly due to the spatial spillover of industrial agglomeration. The expansion of government fiscal expenditure also contributes to the spatial convergence trend of urban economic growth quality. Local economic growth quality is also affected by government fiscal expenditure in neighboring cities.

Green technology innovations, urban innovation environment and CO2 emission reduction in China: Fresh evidence from a partially linear functional-coefficient panel model

• We use a partially linear function-coefficient model to explore the nonlinear moderating effect of the urban innovation environment on the impact of green technology innovation on carbon dioxide emissions. • There are heterogeneous impacts of green technology innovations on CO2 emissions in different periods and different types of cities. • Green technology innovation can reduce CO2 emissions indirectly through industrial structure upgrading. • Government fiscal expenditure cannot significantly impact the CO2 reduction effect of green technologies. • The effect of green technology innovations on CO2 emissions is only significant when the human capital level of a city has reached a certain level. Green technology innovations have a better carbon emission reduction effect in cities with higher human capital levels. Green technology innovations are deemed as effective channels through which economic growth and environmental governance are balanced. However, empirical research on the nexus between green technology innovations and CO 2 emissions, especially in developing countries, remains scant. Employing panel data on 264 prefecture-level cities from 2006 to 2017 in China, we explore the impact of the urban innovation environment on the effect of green technological innovations on CO 2 emissions. The empirical results indicate that green technology innovations have a heterogeneous impact in different types of cities. Meanwhile, green technological innovations can contribute to CO 2 emission mitigation after 2010, while the effect is not significant in Chinese cities before 2010. Secondly, green technology innovations can reduce CO 2 emissions indirectly through industrial structure upgrading. Thirdly, when the urban innovation environment is considered, government fiscal expenditure cannot significantly impact the marginal effect of green technologies. Meanwhile, the marginal mitigation effect of green technology innovations on CO 2 emissions is only significant when the human capital level of a city has reached a certain level. There is a better carbon emission reduction effect in cities with higher human capital levels. The results provide important enlightenment to realize the coordination and unity of economic transition to innovation-driven and green and low-carbon development.

Does Fiscal Expenditure Promote the Upgrading of Regional Manufacturing Industry? Empirical Test Based on the Dual Perspective of Infrastructure and Basic Public Services

The Fifth Plenary Session of the 19th CPC Central Committee set the tone that China’s manufacturing industry should upgrade to advanced, intelligent and high quality. In the traditional theory of industrial structure upgrading, fiscal expenditure is not the main influencing factor. In the new pattern of “dual circulation” development of Chinese economy, the important role of government in economic development should not be ignored in the study of the high-end upgrading of manufacturing industry. Using the panel data of 28 provinces in China from 2008 to 2016, this paper deeply studies the economic effect of the most important expenditure on basic public services and infrastructure on the upgrading of manufacturing industry, as well as the regional heterogeneity and the nonlinear characteristics of the technological progress stage. It is found that the economic effect of general budget expenditure and basic public service expenditure on the high-end upgrading of manufacturing structure shows the characteristics of strong heterogeneity and marginal decline, which mainly comes from the promotion effect of the two types of fiscal expenditure in the eastern region and the hindrance effect in the central and western regions. Especially in the five western provinces where industrialization is slow and heavily dependent on transfer payments, infrastructure expenditure and basic public service expenditure show negative economic effects around 2010, but this does not completely mean the failure of the policy effect of local governments. Poverty reduction and poverty alleviation in such underdeveloped areas often rely more on the development of labor-intensive manufacturing industry. With the improvement of the level of innovative technological progress, the role of basic public service expenditure in promoting the upgrading of manufacturing industry will be gradually strengthened. This paper holds that under the new pattern, the eastern provinces should increase investment in information infrastructure, promote the reform of affordable housing, and release the restrictions on both the household registration of high-skilled talents and the school district of children’s basic education. The central provinces should give further play to the role of the market in allocating resources, and focus on improving the quality of public services such as education and medical treatment to the eastern region, so as to better undertake the transfer of high-skilled talents and manufacturing industry in the eastern region. For special provinces with slow industrialization and mainly relying on central transfer payments, we can appropriately increase the proportion of special transfer payments, strengthen the guidance of subsidies and financial policies on social capital, and stimulate the vitality of market players. Under the background of “tax cut and fee reduction”, this paper provides empirical evidence for the improvement of government fiscal expenditure efficiency, the regional policy design of the upgrading of manufacturing industry, and the optimization of fiscal expenditure structure.

Infrastructure Public–Private Partnership (PPP) Investment and Government Fiscal Expenditure on Science and Technology from the Perspective of Sustainability

In the environment of the continuous development of the Public–Private Partnership (PPP) model, China’s “dual circulation” development pattern orientation and “new normal” economic development reform provide the foundation for the development of the PPP model in the field of infrastructure. A good government investment structure and governance environment will help to improve the financial sustainability of infrastructure investment. This paper studies the mechanism of the relationship between fiscal expenditure on science and technology and the development of infrastructure PPP models based on the data of provincial PPP projects in the World Bank database and carries out an empirical analysis. The results show that the positive effect of government fiscal expenditure on science and technology and the development of the infrastructure PPP model in local regions is significant. In addition, intergovernmental competition within the political system of China will have a restraining effect on this relationship. This has certain theoretical and practical significance for the construction and implementation of the mechanism underlying intergovernmental behavior and the infrastructure PPP model.

Dual‐level impact of regional context and individual attributes on entrepreneurship among return migrants in China

AbstractIndividual attributes have been demonstrated to influence the entrepreneurial decisions of returnees, but little is known about the regional factors. This study employed a dual‐level logistic model to explore the effects of both individual characteristics and regional context on returnee entrepreneurship in China. The results indicated the significance of both individual‐level attributes and regional context in the entrepreneurial entry: regional prosperity, government fiscal expenditure, tax burden, rainfall, and transportation infrastructure significantly affected the entrepreneurial probability. This study extends the returnee entrepreneurship literature by first, elucidating the importance of regional context in entrepreneurship and second, highlighting the joint impact of economic, institutional, and geographical contexts.