From fiscal decentralization to high-quality economic development: role of tax administration intensity

Meng Li and Yunlong Gu

Finance Research Letters, 2025, vol. 77, issue C

Abstract: This study examines how fiscal decentralization influences high-quality development in China, emphasizing tax administration's moderating role. Analyzing panel data from 279 prefecture-level cities (2007–2021), we employ fixed-effects estimation, instrumental variables, and propensity score matching to address endogeneity. Results reveal fiscal decentralization significantly enhances high-quality development, with tax administration intensity amplifying this relationship. Heterogeneity analyses along the Hu Huanyong Line, resource endowment, and urban hierarchy demonstrate that decentralization's impact varies notably across contexts, being more pronounced in southern regions, non-resource-based cities, and metropolitan areas. These findings advance theoretical understanding while providing practical insights for regional policy calibration.

Keywords: Fiscal decentralization; High-quality development; Tax administration; Institutional complementarity; Regional heterogeneity (search for similar items in EconPapers)
JEL-codes: C23 H71 H77 R11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003113

DOI: 10.1016/j.frl.2025.107047

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