Growth versus equity: the effects of centralized fiscal transfers on Chinese provinces

REFERENCES

• Alogoskoufis, G. S., & Smith, R. (1991). The Phillips curve, the persistence of inflation, and the Lucas critique: Evidence from exchange-rate regimes. American Economic Review, 81(5), 1254–1275. https://www.jstor.org/stable/2006916
   Web of Science ®Google Scholar
• Auerbach, A. J., & Gorodnichenko, Y. (2012). Measuring the output responses to fiscal policy. American Economic Journal: Economic Policy, 4(2), 1–27. https://doi.org/10.1257/pol.4.2.1
   Web of Science ®Google Scholar
• Barro, R. J. (1990). Government spending in a simple model of endogeneous growth. Journal of Political Economy, 98(5, Part 2), S103–S125. https://doi.org/10.1086/261726
   Web of Science ®Google Scholar
• Barro, R. J., & Redlick, C. J. (2011). Macroeconomic effects from government purchases and taxes. The Quarterly Journal of Economics, 126(1), 51–102. https://doi.org/10.1093/qje/qjq002
   Web of Science ®Google Scholar
• Beramendi, P., & Rogers, M. (2020). Fiscal decentralization and the distributive incidence of the great recession. Regional Studies, 54(7), 881–896. https://doi.org/10.1080/00343404.2019.1652895
   Web of Science ®Google Scholar
• Blanchard, O., & Perotti, R. (2002). An empirical characterization of the dynamic effects of changes in government spending and taxes on output. The Quarterly Journal of Economics, 117(4), 1329–1368. https://doi.org/10.1162/003355302320935043
   Web of Science ®Google Scholar
• Chung, S.-H., Zhang, M., & Partridge, M. D. (2020). Positive feedback in skill aggregation across Chinese cities. Regional Studies, 54(11), 1596–1611. https://doi.org/10.1080/00343404.2020.1743823
   Web of Science ®Google Scholar
• Crane, B., Albrecht, C., Duffin, K. M., & Albrecht, C. (2018). China’s special economic zones: An analysis of policy to reduce regional disparities. Regional Studies, 5(1), 98–107. https://doi.org/10.1080/21681376.2018.1430612
   Web of Science ®Google Scholar
• Cui, L., Fan, D., Li, Y., & Choi, Y. (2020). Regional competitiveness for attracting and retaining foreign direct investment: A configurational analysis of Chinese provinces. Regional Studies, 54(5), 692–703. https://doi.org/10.1080/00343404.2019.1636023
   Web of Science ®Google Scholar
• Dong, Y. (2013). Research on the financial equalisation effect of central transfer payment. Economic Theory and Economic Management, 10, 61–70. [in Chinese]
   Google Scholar
• Ezcurra, R., & Rodríguez-Pose, A. (2013). Political decentralization, economic growth and regional disparities in the OECD. Regional Studies, 47(3), 388–401. https://doi.org/10.1080/00343404.2012.731046
   Web of Science ®Google Scholar
• Fan, F., Li, M., Tao, R., & Yang, D. (2020). Transfer-based decentralisation, economic growth and spatial inequality: Evidence from China’s 2002–2003 tax sharing reform. Urban Studies, 57(4), 806–826. https://doi.org/10.1177/0042098019856780
   Web of Science ®Google Scholar
• Fan, Z., & Wan, G. (2017). The fiscal risk of local government revenue in the people’s republic of China. In Central and local government relations in Asia (pp. 223–249). Edward Elgar. https://doi.org/10.4337/9781786436870.00015.
   Google Scholar
• Gao, J., Liu, Y., Chen, J., & Cai, Y. (2022). Demystifying the geography of income inequality in rural China: A transitional framework. Journal of Rural Studies, 93, 398–407. https://doi.org/10.1016/j.jrurstud.2019.01.010
   Web of Science ®Google Scholar
• Gong, F., & Li, Z. (2016). Helping hand, or incentive trap? – Effectiveness evaluation of balanced transfer payment in China. Economic Review, 5, 3–23. https://doi.org/10.19361/j.er.2016.05.01 [in Chinese]
   Google Scholar
• Goodspeed, T. J. (2020). Decentralization and intra-country transfers in the great recession: The case of the European union. Regional Studies, 54(7), 931–941. https://doi.org/10.1080/00343404.2019.1666207
   Web of Science ®Google Scholar
• Gordon, R., & Krenn, R. (2010). The end of the Great Depression 1939–41: Policy contributions and fiscal multipliers. https://doi.org/10.3386/w16380
   Google Scholar
• Guo, Q., Liu, C., & Ma, G. (2016). How large is the local fiscal multiplier? Evidence from Chinese counties. Journal of Comparative Economics, 44(2), 343–352. https://doi.org/10.1016/j.jce.2015.06.002
   Web of Science ®Google Scholar
• Hall, R. E. (2009). By how much does GDP rise if the government buys more output? (Working Paper No. 15496). National Bureau of Economic Research (NBER).
   Google Scholar
• Hong, Y. (2006). China’s economic transformation and transition economics. Economic Perspective, 7, 26–31. [in Chinese]
   Google Scholar
• Huang, B., & Chen, K. (2012). Are intergovernmental transfers in China equalizing? China Economic Review, 23(3), 534–551. https://doi.org/10.1016/j.chieco.2012.01.001
   Web of Science ®Google Scholar
• Ilzetzki, E., Mendoza, E. G., & Végh, C. A. (2013). How big (small?) are fiscal multipliers? Journal of Monetary Economics, 60(2), 239–254. https://doi.org/10.1016/j.jmoneco.2012.10.011
   Web of Science ®Google Scholar
• Koop, G., Pesaran, M. H., & Potter, S. M. (1996). Impulse response analysis in nonlinear multivariate models. Journal of Econometrics, 74(1), 119–147. https://doi.org/10.1016/0304-4076(95)01753-4
   Web of Science ®Google Scholar
• Krugman, P. (2011). The New economic geography, Now middle-aged. Regional Studies, 45(1), 1–7. https://doi.org/10.1080/00343404.2011.537127
   Web of Science ®Google Scholar
• Kyriacou, A. P., Muinelo-Gallo, L., & Roca-Sagalés, O. (2017). Regional inequalities, fiscal decentralization and government quality. Regional Studies, 51(6), 945–957. https://doi.org/10.1080/00343404.2016.1150992
   Web of Science ®Google Scholar
• Li, R., & Zhou, Y. (2021). Estimating local fiscal multipliers using political connections. China Economic Review, 66, 101599. https://doi.org/10.1016/j.chieco.2021.101599
   Web of Science ®Google Scholar
• Liu, Y., Martinez-Vazquez, J., & Wu, A. M. (2017). Fiscal decentralization, equalization, and intra-provincial inequality in China. International Tax and Public Finance, 24(2), 248–281. https://doi.org/10.1007/s10797-016-9416-1
   Web of Science ®Google Scholar
• Luintel, K. B., Matthews, K., Minford, L., Valentinyi, A., & Wang, B. (2020). The role of provincial government spending composition in growth and convergence in China. Economic Modelling, 90(October 2019), 117–134. https://doi.org/10.1016/j.econmod.2020.04.024
   Google Scholar
• Ma, G., & Mao, J. (2018). Fiscal decentralisation and local economic growth: Evidence from a fiscal reform in China. Fiscal Studies, 39(1), 159–187. https://doi.org/10.1111/j.1475-5890.2017.12148
   Web of Science ®Google Scholar
• Ma, H., & Ren, Z. (2017). The effect of the transfer payment on financial equalisation at the county level. Public Finance Research, 5, 2–12. https://doi.org/10.19477/j.cnki.11-1077/f.2017.05.001 [in Chinese]
   Google Scholar
• Mackay, R. R. (2001). Regional taxing and spending: The search for balance. Regional Studies, 35(6), 563–575. https://doi.org/10.1080/00343400120065723
   Web of Science ®Google Scholar
• McCann, P. (2020). Perceptions of regional inequality and the geography of discontent: Insights from the UK. Regional Studies, 54(2), 256–267. https://doi.org/10.1080/00343404.2019.1619928
   Web of Science ®Google Scholar
• Mountford, A., & Uhlig, H. (2009). What are the effects of fiscal policy shocks? Journal of Applied Econometrics, 24(6), 960–992. https://doi.org/10.1002/jae.1079
   Web of Science ®Google Scholar
• Panzera, D., & Postiglione, P. (2022). The impact of regional inequality on economic growth: A spatial econometric approach. Regional Studies, 56(5), 687–702. https://doi.org/10.1080/00343404.2021.1910228
   Web of Science ®Google Scholar
• Pesaran, M. H., & Smith, R. P. (2018). Tests of policy interventions in DSGE models. Oxford Bulletin of Economics and Statistics, 80(3), 457–484. https://doi.org/10.1111/obes.12224
   Web of Science ®Google Scholar
• Qiao, B., Martinez-Vazquez, J., & Xu, Y. (2008). The tradeoff between growth and equity in decentralization policy: China’s experience. Journal of Development Economics, 86(1), 112–128. https://doi.org/10.1016/j.jdeveco.2007.05.002
   Web of Science ®Google Scholar
• Ramey, V. A. (2019). Ten years after the financial crisis: What have we learned from the renaissance in fiscal research? Journal of Economic Perspectives, 33(2), 89–114. https://doi.org/10.1257/jep.33.2.89
   Web of Science ®Google Scholar
• Ramey, V. A., & Zubairy, S. (2018). Government spending multipliers in good times and in Bad: Evidence from US historical data. Journal of Political Economy, 126(2), 850–901. https://doi.org/10.1086/696277
   Web of Science ®Google Scholar
• Rudebusch, G. D. (2005). Assessing the Lucas critique in monetary policy models. Journal of Money, Credit and Banking, 37(2), 245–272. https://doi.org/10.1353/mcb.2005.0024
   Web of Science ®Google Scholar
• Shan, Q., Lv, J., Wang, W., & Huang, N. (2020). Taylor rule construction and rule interest rate estimation in China. Journal of Financial Research, 9, 20–39. [in Chinese]
   Google Scholar
• Shen, C., Jin, J., & Zou, H. (2012). Fiscal decentralization in China: History, impact, challenges and next steps. Annals of Economics and Finance, 13(1).
   Web of Science ®Google Scholar
• Shen, G., & Chen, B. (2017). Zombie firms and over-capacity in Chinese manufacturing. China Economic Review, 44, 327–342. https://doi.org/10.1016/j.chieco.2017.05.008
   Web of Science ®Google Scholar
• Shleifer, A., & Vishny, R. W. (1998). The grabbing hand: Government pathologies and their cures. Harvard University Press.
   Google Scholar
• Sicular, T., Li, S., Yue, X., & Sato, H. eds. (2020). Changing trends in China’s inequality. Oxford University Press. https://doi.org/10.1093/oso/9780190077938.001.0001
   Google Scholar
• Smith, R. P. (2009). EMU and the Lucas critique. Economic Modelling, 26(4), 744–750. https://doi.org/10.1016/j.econmod.2008.07.008
   Web of Science ®Google Scholar
• Song, H., Zhang, M., & Wang, R. (2016). Amenities and spatial talent distribution: Evidence from the Chinese IT industry. Cambridge Journal of Regions, Economy and Society, rsw017, https://doi.org/10.1093/cjres/rsw017
   Google Scholar
• Song, Y. (2013). Rising Chinese regional income inequality: The role of fiscal decentralization. China Economic Review, 27, 294–309. https://doi.org/10.1016/j.chieco.2013.02.001
   Web of Science ®Google Scholar
• Sorens, J. (2014). Does fiscal federalism promote regional inequality? An empirical analysis of the OECD, 1980–2005. Regional Studies, 48(2), 239–253. https://doi.org/10.1080/00343404.2012.661851
   Web of Science ®Google Scholar
• Tan, Y., Huang, Y., & Woo, W. T. (2016). Zombie firms and the crowding-out of private investment in China. Asian Economic Papers, 15(3), 32–55. https://doi.org/10.1162/ASEP_a_00474
   Web of Science ®Google Scholar
• Tu, L. (2013). An empirical analysis of the impact of the central transfer payment on the regional financial balance. Collected Essays on Finance and Economics, 3, 21–25. https://doi.org/10.13762/j.cnki.cjlc.2013.03.005 [in Chinese]
   Google Scholar
• Wang, W., Wang, Z., & Guo, L. (2020). Study on the regional difference of macroeconomic effects of transfer payment. Modern Economic Science, 42(6), 38–49. [in Chinese]
   Google Scholar
• Xie, Y., & Zhou, X. (2014). Income inequality in today’s China. Proceedings of the National Academy of Sciences, 111(19), 6928–6933. https://doi.org/10.1073/pnas.1403158111
   PubMed Web of Science ®Google Scholar
• Yang, C.-H., & Lin, H.-L. (2012). Openness, absorptive capacity, and regional innovation in China. Environment and Planning A: Economy and Space, 44(2), 333–355. https://doi.org/10.1068/a44182
   Web of Science ®Google Scholar
• Yang, X., Minford, L., Meenagh, D., & Matthews, K. (2021). Centralised fiscal transfers and the growth–inequality nexus in China (China Shadow Bank Project Working Paper No. 21/01).
   Google Scholar
• Zhang, J. (2021). A survey on income inequality in China. Journal of Economic Literature, 59(4), 1191–1239. https://doi.org/10.1257/jel.20201495
   Web of Science ®Google Scholar
• Zhang, W. (2020). Political incentives and local government spending multiplier: Evidence for Chinese provinces (1978–2016). Economic Modelling, 87, 59–71. https://doi.org/10.1016/j.econmod.2019.07.006
   Web of Science ®Google Scholar
• Zhang, X. (2006). Fiscal decentralization and political centralization in China: Implications for growth and inequality. Journal of Comparative Economics, 34(4), 713–726. https://doi.org/10.1016/j.jce.2006.08.006
   Web of Science ®Google Scholar
• Zhao, S., & Wu, S. (2018). Research on the factors and improvements of China’s return on capital from the perspective of spatial economics. Journal of Management World, 34(2), 68–79. https://doi.org/10.19744/j.cnki.11-1235/f.2018.02.007 [in Chinese]
   Google Scholar
• Zhao, Y., & Fu, W. (2017). Transfer payments, fiscal equalisation and local public goods supply. Public Finance Research, 5, 13–23. https://doi.org/10.19477/j.cnki.11-1077/f.2017.05.002 [in Chinese]
   Google Scholar
• Zhao, Z. J. (2009). Fiscal decentralization and provincial-level fiscal disparities in China: A Sino-U.S. comparative perspective. Public Administration Review, 69, S67–S74. https://doi.org/10.1111/j.1540-6210.2009.02091.x
   Web of Science ®Google Scholar