Growth Effects of Fiscal Decentralization: Empirical Evidence from China's Provinces |
| |
| Authors: | Abdul Jalil Mete Feridun Bansi L Sawhney |
| |
| Institution: | 1. School of Economics, Quaid-i-Azam University, Islamabad, Pakistan;2. Department of International Business, University of Greenwich Business School, London, UK;3. Merrick School of Business, University of Baltimore, Baltimore, Maryland |
| |
| 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 |
|
|
