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I n Search of Fiscal Interactions: A Spatial Analysis of C hinese Provincial Infrastructure Spending
Author(s) -
Zheng Xinye,
Song Feng,
Yu Yihua,
Song Shunfeng
Publication year - 2015
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12176
Subject(s) - yardstick , economics , competition (biology) , public spending , public economics , test (biology) , fiscal policy , macroeconomics , political science , ecology , paleontology , geometry , mathematics , politics , law , biology
Using a dataset for 31 C hinese provinces from 1998 to 2006, this paper provides a spatial Durbin panel analysis to test for fiscal interactions among C hina's provinces in their public spending on infrastructure. We find significant positive interactions across C hinese provincial governments. Further analysis attempting to distinguish between the possible sources of such fiscal interactions reveals evidence of expenditure competition instead of yardstick competition.