Growth effects of fiscal decentralization: empirical evidence from China’s provinces

Abdul Jalil, Mete Feridun and Bansi Sawhney

No 12777, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: In this paper, we revisit the fiscal decentralization-economic growth nexus in the case of China's provinces using autoregressive distributed lag bounds tests and pooled mean group estimators with time series data from the period 1979-2009. Using principal component analysis, we build a novel composite fiscal decentralization indicator consisting of five different fiscal decentralization measures and use it in the models in addition to conventional fiscal decentralization variables. The results suggest that there is a strong, positive, and statistically significant relationship between fiscal decentralization and economic growth in most provinces in China in both the short run and the long run.

Keywords: China; economic growth; fiscal decentralization (search for similar items in EconPapers)
Date: 2014-07
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Citations: View citations in EconPapers (4)

Published in Emerging Markets Finance and Trade 4.50(2014): pp. 176-195

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Journal Article: Growth Effects of Fiscal Decentralization: Empirical Evidence from China's Provinces (2014)
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