Exploring the Influence of Digital Infrastructure on Fiscal Self-Sufficiency: Empirical Evidence From 29 Provincial in China

Wenjun Mai, Cunlin Li, Yanpeng Chen and Lijun Mai

SAGE Open, 2024, vol. 14, issue 4, 21582440241284108

Abstract: As a major emerging economy, China government debt burden on local governments remains substantial, so enhance fiscal self-sufficiency and debt sustainability is so important. Utilizing panel data spanning from 2004 to 2020 across 29 provincial-level governments in China, this study employs the SYS-GMM approach to empirically validate the significant negative impact of digital infrastructure development on governments’ fiscal self-sufficiency rates. Furthermore, the research shows the significant positive mediating role of technological expenditure efficiency between digital infrastructure and fiscal self-sufficiency, implying that digital infrastructure can enhance fiscal self-sufficiency by augmenting technological innovation efficiency. Under the moderating effect mechanism, fiscal decentralization positively moderates the relationship between digital infrastructure and fiscal self-sufficiency. Heterogeneity analysis reveals that the impact of digital infrastructure on fiscal self-sufficiency is more pronounced in high-density regions. At the same time, its effect is less significant in low-density areas, indicating regional disparities in China’s digital infrastructure development. The contribution of this study is grounded in fiscal decentralization theory, policy recommendations advocate granting local governments greater autonomy over tax categories and broadening their fiscal revenue. Concurrent efforts should be directed towards deepening reforms in the fiscal and taxation systems, as well as budget management mechanisms.

Keywords: digital infrastructure; fiscal self-sufficiency; technology expenditure efficiency; China (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/21582440241284108 (text/html)

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:sae:sagope:v:14:y:2024:i:4:p:21582440241284108

DOI: 10.1177/21582440241284108

Access Statistics for this article

More articles in SAGE Open
Bibliographic data for series maintained by SAGE Publications ().