Impact of financial decentralisation on industrial structure upgrading: From the coordination perspective of fiscal decentralisation

Tianqi Zhu, Lijuan Zhao, Lu Zhao and Xiaohong Kang

International Review of Financial Analysis, 2025, vol. 104, issue PA

Abstract: The upgrading of industrial structure is the driving force of economic transformation. This study explores the quantitative relationship between fiscal decentralisation, financial decentralisation and industrial structure upgrading. The results show that: (1) Financial decentralisation has a positive impact on the industrial structure advancement, and fiscal decentralisation has a positive impact on the industrial structure rationalisation. (2) Financial decentralisation has a positive spillover effect on the industrial structure rationalisation of neighbouring cities, while fiscal decentralisation has a negative spillover effect on the industrial structure advancement of neighbouring cities. (3) When fiscal decentralisation exceeds the threshold, the impact of financial decentralisation on the industrial structure advancement in non-coordinated cities shifts from positive to negative, while in coordinated cities, the impact remains positive. (4) When fiscal decentralisation exceeds the threshold, the impact of financial decentralisation on the industrial structure rationalisation in non-coordinated cities turns from negative to positive, while in coordinated cities, the impact is not significant.

Keywords: Fiscal decentralisation; Financial decentralisation; Industrial structure upgrading; Credit availability; Enterprise cost (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003886

DOI: 10.1016/j.irfa.2025.104301

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