Diminishing Target-based GDP Manipulation: Evidence from China

Binlei Gong, Yuhui Shen and Shuai Chen

Journal of Public Economics, 2025, vol. 244, issue C

Abstract: GDP manipulation is a prevalent form of hidden action, often arising from the principal-agent problem. Utilizing Bunching Estimation within an innovative ratio form approach, this study identifies and quantifies target-based GDP manipulation. Our empirical analysis offers evidence of such manipulation at the prefectural level in China to meet predetermined targets. However, China’s target-based GDP manipulation is diminishing over time. Furthermore, the findings suggest that reducing the weight of economic performance in local government assessments and adopting the soft target-setting restrictions have served as effective strategies to significantly mitigate China’s GDP manipulation in recent years.

Keywords: Target-based GDP manipulation; Bunching Estimation; Ratio form approach; Prefectural-level GDP reporting; Manipulation mitigation (search for similar items in EconPapers)
JEL-codes: D73 H11 H7 O1 P2 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272725000477
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:244:y:2025:i:c:s0047272725000477

DOI: 10.1016/j.jpubeco.2025.105349

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().