ISSN 0253-2778

CN 34-1054/N

open
Free to Publish. Free to Read.
Open AccessOpen Access JUSTC Original Paper

The impact of financial and fiscal decentralization on investment and consumption ratio

  • School of Management, University of Science and Technology of China, Hefei 230026, China

Cite this:
https://doi.org/10.3969/j.issn.0253-2778.2018.05.010
  • Received Date: 12 October 2017
  • Accepted Date: 11 April 2018
  • Rev Recd Date: 11 April 2018
  • Publish Date: 31 May 2018
    Abstract

  • Abstract

    Based on the analysis and testing of provincial panel data in China from 1998 to 2014, financial decentralization was taken as the threshold variable to investigate the nonlinear relationship between China’s financial decentralization and ratio of investment to consumption. The results show that: ① At different levels of financial decentralization, China’s financial decentralization has different effects on the ratio of investment to consumption, which is characterized by the nonlinear characteristics of “double threshold effect”. ② The nonlinear relationship varies with different level of financial decentralization. In provinces with low levels of financial decentralization, financial decentralization is positively related to the ratio of investment to consumption; in the provinces with medium levels of financial decentralization, the relationship between financial decentralization and the ratio of investment to consumption is uncertain; in the provinces with high levels of financial decentralization, financial decentralization is negatively related to the ratio of investment to consumption. ③ Fiscal decentralization has some influence on the nonlinear relationship between financial decentralization and the ratio of investment to consumption. The combined effect of financial and fiscal decentralization has expanded the ratio of investment to consumption. ④ The number of provinces with high levels of financial decentralization in China is quite small, with most of the provinces being still in the stage of medium and low financial decentralization. In order to reduce the ratio of investment to consumption, the financial decentralization process should be promoted vigorously in provinces with low or medium levels of financial decentralization.

    Abstract

    Based on the analysis and testing of provincial panel data in China from 1998 to 2014, financial decentralization was taken as the threshold variable to investigate the nonlinear relationship between China’s financial decentralization and ratio of investment to consumption. The results show that: ① At different levels of financial decentralization, China’s financial decentralization has different effects on the ratio of investment to consumption, which is characterized by the nonlinear characteristics of “double threshold effect”. ② The nonlinear relationship varies with different level of financial decentralization. In provinces with low levels of financial decentralization, financial decentralization is positively related to the ratio of investment to consumption; in the provinces with medium levels of financial decentralization, the relationship between financial decentralization and the ratio of investment to consumption is uncertain; in the provinces with high levels of financial decentralization, financial decentralization is negatively related to the ratio of investment to consumption. ③ Fiscal decentralization has some influence on the nonlinear relationship between financial decentralization and the ratio of investment to consumption. The combined effect of financial and fiscal decentralization has expanded the ratio of investment to consumption. ④ The number of provinces with high levels of financial decentralization in China is quite small, with most of the provinces being still in the stage of medium and low financial decentralization. In order to reduce the ratio of investment to consumption, the financial decentralization process should be promoted vigorously in provinces with low or medium levels of financial decentralization.
    • FullText(HTML)
  • loading
    • References(26)
  • [1]
    傅勇, 李良松. 金融分权的逻辑: 地方干预与中央集中的视角[J]. 上海金融, 2015(10): 47-53.
    [2]
    MONTINOLA G, QIAN Y, WEINGAST B R. Federalism, Chinese style: The political basis for economic success in China[J]. World Politics, 1995, 48(1): 50-81.
    [3]
    LIN J Y, LIU Z. Fiscal decentralization and economic growth in China[J]. Economic Development and Cultural Change, 2000, 49(1): 1-21.
    [4]
    MARTINEZ-VAZQUEZ J, MCNAB R M. Fiscal decentralization and economic growth[J]. World Development, 2003, 31(9): 1597-1616.
    [5]
    张晏, 龚六堂. 分税制改革, 财政分权与中国经济增长[J]. 经济学(季刊), 2005, 5(1): 75-108.
    ZHANG Yan, GONG Liutang. The Fenshuizhi reform, fiscal decentralization, and economic growth in China[J]. China Economic Quarterly, 2005, 5(1): 75-108.
    [6]
    傅勇. 财政分权, 政府治理与非经济性公共物品供给[J]. 经济研究, 2010, 8(4):4-15.
    FU Yong.Fiscal decentralization, governance and non-economic public goods provision[J]. Economic Research Journal, 2010, 8(4):4-15.
    [7]
    纪志宏, 周黎安, 王鹏, 等. 地方官员晋升激励与银行信贷——来自中国城市商业银行的经验证据[J]. 金融研究, 2014(1): 1-15.
    JI Zhihong, ZHOU Li’an, WANG Peng, et al. Promotion incentives of local officials and bank lending: Evidence from China’s city commercial banks[J]. Journal of Financial Research, 2014(1): 1-15.
    [8]
    郭峰. 地方性金融机构设立的内生条件和攀比效应——基于村镇银行的空间 Probit模型分析[J]. 金融学季刊, 2014, 8(6): 37-56 .
    GUO Feng. Endogenous conditions and competitive effect of the establishment of local financial institutions in China: An analysis of the county banks using spatial Probit model[J]. Quarterly Journal of Finance, 2014, 8(6): 37-56 .
    [9]
    张杰. 中国的高货币化之谜[J]. 经济研究, 2006(6): 59-69.
    ZHANG Jie. An insight into the high level of China’s monetarization[J]. Economic Research Journal, 2006(6): 59-69.
    [10]
    卢峰, 姚洋. 金融压抑下的法治、金融发展和经济增长[J]. 中国社会科学, 2004(1): 42-55.
    LU Feng, YAO Yang. Legality, financial development and economic growth under financial repression[J]. Social Sciences in China, 2004(1): 42-55.
    [11]
    ALLEN F, QIAN J, QIAN M. Law, finance, and economic growth in China[J]. Journal of Financial Economics, 2005, 77(1): 57-116.
    [12]
    BRANDT L, LI H. Bank discrimination in transition economies: Ideology, information or incentives?[J]. Journal of Comparative Economics, 2010, 31(3): 387-413.
    [13]
    汪敏, 陈浩, 陈东. 金融分权对中国民间投资的空间溢出效应[J]. 山西财经大学学报, 2017, 39(1): 40-54.
    WANG Min, CHEN Hao, CHEN Dong. Research on the spatial spillover effect of financial decentralization on Chinese private investment[J]. Journal of Shanxi University of Finance and Economics, 2017, 39(1): 40-54.
    [14]
    叶志强, 陈习定, 张顺明. 金融发展能减少城乡收入差距吗?——来自中国的证据[J]. 金融研究, 2011(2):42-56.
    [15]
    董雨翀, 万方. 金融分权与地方经济增长[J]. 金融与经济, 2015(5): 12-17.
    [16]
    陈宝东, 邓晓兰. 财政分权, 金融分权与地方政府债务增长[J]. 财政研究, 2017(5): 38-53.
    CHEN Baodong, DENG Xiaolan. Fiscal decentralization, financial decentralization and the growth of local debt[J]. Public Finance Research, 2017(5): 38-53.
    [17]
    洪正, 胡勇锋. 中国式金融分权[J]. 经济学(季刊), 2017, 16(2): 545-576.
    HONG Zheng, HU Yongfeng. China’s financial decentralization[J]. China Economic Quarterly, 2017, 16(2): 545-576.
    [18]
    何德旭, 苗文龙. 财政分权是否影响金融分权——基于省际分权数据空间效应的比较分析[J]. 经济研究, 2016, 51(2): 42-55.
    HE Dexu, MIAO Wenlong. Does the fiscal decentralization impact the financial decentralization? [J]. Economic Research Journal, 2016, 51(2): 42-55.
    [19]
    QIAN Y, ROLAND G. Federalism and the soft budget constraint[J]. American Economic Review, 1998: 1143-1162.
    [20]
    HANSEN B E. Threshold effects in non-dynamic panels: Estimation, testing, and inference[J]. Journal of Econometrics, 1999, 93(2): 345-368.
    [21]
    BAI J. Estimating multiple breaks one at a time[J]. Econometric Theory, 1997, 13(3): 315-352.
    [22]
    BALLI H O, SRENSEN B E. Interaction effects in econometrics[J]. Empirical Economics, 2013, 45(1): 583-603.
    [23]
    吕冰洋, 毛捷. 高投资, 低消费的财政基础[J]. 经济研究, 2014, 49(5): 4-18.
    LYU Bingyang, MAO Jie. Fiscal foundation of high investment and low consumption in China[J]. Economic Research Journal, 2014, 49(5): 4-18.
    [24]
    贺俊, 吴照龚. 财政分权, 经济增长与城乡收入差距——基于省际面板数据的分析[J]. 当代财经, 2013(5): 27-38.
    HE Jun, WU Zhaogong. Fiscal decentralization, economic growth and urban-rural income gap: An analysis based on inter-province panel date [J]. Contemporary Finance & Economics, 2013(5): 27-38.
    [25]
    PESARAN M H. A simple panel unit root test in the presence of cross-section dependence[J]. Journal of Applied Econometrics, 2007, 22(2): 265-312.
    [26]
    PESARAN M H. General diagnostic tests for cross section dependence in panels[R]. New York: SSRN, 2004: CESifo Working Paper Series No. 1229.)
    • Supplements(0)
    • Related Articles
    • Track Citations
  • 加载中

Catalog

    |
    Get Citation
    PDF
    XML
    [1]
    傅勇, 李良松. 金融分权的逻辑: 地方干预与中央集中的视角[J]. 上海金融, 2015(10): 47-53.
    [2]
    MONTINOLA G, QIAN Y, WEINGAST B R. Federalism, Chinese style: The political basis for economic success in China[J]. World Politics, 1995, 48(1): 50-81.
    [3]
    LIN J Y, LIU Z. Fiscal decentralization and economic growth in China[J]. Economic Development and Cultural Change, 2000, 49(1): 1-21.
    [4]
    MARTINEZ-VAZQUEZ J, MCNAB R M. Fiscal decentralization and economic growth[J]. World Development, 2003, 31(9): 1597-1616.
    [5]
    张晏, 龚六堂. 分税制改革, 财政分权与中国经济增长[J]. 经济学(季刊), 2005, 5(1): 75-108.
    ZHANG Yan, GONG Liutang. The Fenshuizhi reform, fiscal decentralization, and economic growth in China[J]. China Economic Quarterly, 2005, 5(1): 75-108.
    [6]
    傅勇. 财政分权, 政府治理与非经济性公共物品供给[J]. 经济研究, 2010, 8(4):4-15.
    FU Yong.Fiscal decentralization, governance and non-economic public goods provision[J]. Economic Research Journal, 2010, 8(4):4-15.
    [7]
    纪志宏, 周黎安, 王鹏, 等. 地方官员晋升激励与银行信贷——来自中国城市商业银行的经验证据[J]. 金融研究, 2014(1): 1-15.
    JI Zhihong, ZHOU Li’an, WANG Peng, et al. Promotion incentives of local officials and bank lending: Evidence from China’s city commercial banks[J]. Journal of Financial Research, 2014(1): 1-15.
    [8]
    郭峰. 地方性金融机构设立的内生条件和攀比效应——基于村镇银行的空间 Probit模型分析[J]. 金融学季刊, 2014, 8(6): 37-56 .
    GUO Feng. Endogenous conditions and competitive effect of the establishment of local financial institutions in China: An analysis of the county banks using spatial Probit model[J]. Quarterly Journal of Finance, 2014, 8(6): 37-56 .
    [9]
    张杰. 中国的高货币化之谜[J]. 经济研究, 2006(6): 59-69.
    ZHANG Jie. An insight into the high level of China’s monetarization[J]. Economic Research Journal, 2006(6): 59-69.
    [10]
    卢峰, 姚洋. 金融压抑下的法治、金融发展和经济增长[J]. 中国社会科学, 2004(1): 42-55.
    LU Feng, YAO Yang. Legality, financial development and economic growth under financial repression[J]. Social Sciences in China, 2004(1): 42-55.
    [11]
    ALLEN F, QIAN J, QIAN M. Law, finance, and economic growth in China[J]. Journal of Financial Economics, 2005, 77(1): 57-116.
    [12]
    BRANDT L, LI H. Bank discrimination in transition economies: Ideology, information or incentives?[J]. Journal of Comparative Economics, 2010, 31(3): 387-413.
    [13]
    汪敏, 陈浩, 陈东. 金融分权对中国民间投资的空间溢出效应[J]. 山西财经大学学报, 2017, 39(1): 40-54.
    WANG Min, CHEN Hao, CHEN Dong. Research on the spatial spillover effect of financial decentralization on Chinese private investment[J]. Journal of Shanxi University of Finance and Economics, 2017, 39(1): 40-54.
    [14]
    叶志强, 陈习定, 张顺明. 金融发展能减少城乡收入差距吗?——来自中国的证据[J]. 金融研究, 2011(2):42-56.
    [15]
    董雨翀, 万方. 金融分权与地方经济增长[J]. 金融与经济, 2015(5): 12-17.
    [16]
    陈宝东, 邓晓兰. 财政分权, 金融分权与地方政府债务增长[J]. 财政研究, 2017(5): 38-53.
    CHEN Baodong, DENG Xiaolan. Fiscal decentralization, financial decentralization and the growth of local debt[J]. Public Finance Research, 2017(5): 38-53.
    [17]
    洪正, 胡勇锋. 中国式金融分权[J]. 经济学(季刊), 2017, 16(2): 545-576.
    HONG Zheng, HU Yongfeng. China’s financial decentralization[J]. China Economic Quarterly, 2017, 16(2): 545-576.
    [18]
    何德旭, 苗文龙. 财政分权是否影响金融分权——基于省际分权数据空间效应的比较分析[J]. 经济研究, 2016, 51(2): 42-55.
    HE Dexu, MIAO Wenlong. Does the fiscal decentralization impact the financial decentralization? [J]. Economic Research Journal, 2016, 51(2): 42-55.
    [19]
    QIAN Y, ROLAND G. Federalism and the soft budget constraint[J]. American Economic Review, 1998: 1143-1162.
    [20]
    HANSEN B E. Threshold effects in non-dynamic panels: Estimation, testing, and inference[J]. Journal of Econometrics, 1999, 93(2): 345-368.
    [21]
    BAI J. Estimating multiple breaks one at a time[J]. Econometric Theory, 1997, 13(3): 315-352.
    [22]
    BALLI H O, SRENSEN B E. Interaction effects in econometrics[J]. Empirical Economics, 2013, 45(1): 583-603.
    [23]
    吕冰洋, 毛捷. 高投资, 低消费的财政基础[J]. 经济研究, 2014, 49(5): 4-18.
    LYU Bingyang, MAO Jie. Fiscal foundation of high investment and low consumption in China[J]. Economic Research Journal, 2014, 49(5): 4-18.
    [24]
    贺俊, 吴照龚. 财政分权, 经济增长与城乡收入差距——基于省际面板数据的分析[J]. 当代财经, 2013(5): 27-38.
    HE Jun, WU Zhaogong. Fiscal decentralization, economic growth and urban-rural income gap: An analysis based on inter-province panel date [J]. Contemporary Finance & Economics, 2013(5): 27-38.
    [25]
    PESARAN M H. A simple panel unit root test in the presence of cross-section dependence[J]. Journal of Applied Econometrics, 2007, 22(2): 265-312.
    [26]
    PESARAN M H. General diagnostic tests for cross section dependence in panels[R]. New York: SSRN, 2004: CESifo Working Paper Series No. 1229.)
    Recommended articles
    TrendMD
    Volume 48 Issue 5 page: 409-419
    Cover

    Article Metrics

    Article views (26) PDF downloads(111)
    Proportional views

    Copyright © Editorial Office of JUSTC, All Rights Reserved. 皖ICP备05002528号

    Supported by: Beijing Renhe Information Technology Co. Ltd    

    /

    DownLoad:  Full-Size Img  PowerPoint
    Return
    Return