Can Adjust the Fiscal Expenditure Structure Promote Inclusive Green Growth? Empirical Evidence From China

Yanghong Wu, Li Song and Xiaoliang Zhou

Review of Development Economics, 2025, vol. 29, issue 3, 1712-1733

Abstract: In the context of the intensification of the contradiction between fiscal revenue and expenditure in China, the adjustment of fiscal policy with Inclusive Green Growth as the development goal is conducive to improving the efficiency of the use of fiscal funds. Therefore, it is necessary to empirically test how the fiscal expenditure structure affects Inclusive Green Growth. Through the theoretical combing of the influence mechanism of Inclusive Green Growth and fiscal expenditure structure, the corresponding research hypotheses are put forward; Based on this, China's Regional Panel Data from 2007 to 2019 is selected as the data of the investigation period, and a two‐way fixed effect model is set; Finally, the proposed hypothesis is empirically tested and analyzed. The results show that fiscal economic constructive expenditure has a “U” shaped nonlinear impact on Inclusive Green Growth. Fiscal social security expenditure and fiscal ecological protection expenditure have a significant positive impact on Inclusive Green Growth; Grouping sample regression analysis is consistent in the overall direction of fiscal expenditure structure; Marketization index, human capital, and environmental regulation all have a positive moderating effect on the impact relationship.

Date: 2025
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