The Effect of Local Government Debt on Regional Economic Growth in China: A Nonlinear Relationship Approach

Zhao, Rubo; Tian, Yixiang; Lei, Ao; Boadu, Francis; Ren, Ze

doi:10.3390/su11113065

Cited by 28 publications

(14 citation statements)

References 60 publications

(106 reference statements)

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“…Spatial autocorrelation theory has been a key element in spatial research for over thirty years. Various spatial correlation measurements have been proposed so we can examine spatial analysis evolution from different perspectives [64][65][66][67][68][69]. Still, Moran's I statistic has been commonly used as an indicator of global spatial autocorrelation [70].…”

Section: Spatial Autocorrelation Analysismentioning

confidence: 99%

Spatial Analysis of Socio-Economic Driving Factors of Food Expenditure Variation between Provinces in Indonesia

2020

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Food security has become one of the global challenges; therefore, monitoring food consumption is required. As food consumption is a resultant of food availability at an affordable price, food expenditure actually is a key indicator to assess food security policy. Particularly, the link of food expenditure with socio-economic factors based on the perspective of spatial connectivity should be understood as nowadays food supply and demand between regions are increasingly connected. This study aims to define socio-economic driving factors of food expenditure that considering spatial connectivity between provinces in Indonesia. Data of household food expenditure and socio-economic factors by province including urbanization level, economic growth, gross domestic regional product (GDRP) per capita, poverty severity index, and unemployment rate were used. The preliminary test on the spatial correlation of food expenditure showed a significant result; thus, a spatial regression approach was employed. The results showed that declining food expenditure did not simply indicate increasing prosperity. Larger income disparity among the poor has become crucial to detect lower food expenditure caused by a lack of income. In addition, the increasing unemployment rate was followed by increasing food expenditure. Despite economic growth, increasing GDRP per capita and urbanization contributing to declining food expenditure, both poverty and unemployment are the main issues that threaten household's ability to afford food. Furthermore, the effect of food expenditure in the neighboring region is also significant, but it shows a contradictory relationship as food expenditure in a region is decreasing when food expenditure in its neighbors is increasing, and vice versa. Therefore, reducing disparities in economic growth, GDRP per capita, urbanization, poverty, and unemployment rate between provinces is also crucial to support more equal food expenditure as well as to achieve the second goal of SDG's (Sustainable Development Goals) in improving food security.

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Section: Spatial Autocorrelation Analysismentioning

confidence: 99%

Spatial Analysis of Socio-Economic Driving Factors of Food Expenditure Variation between Provinces in Indonesia

2020

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“…In this context, the mutual reference and imitation of government debt decisions between neighboring provinces will create an impact on economic growth. Therefore, the impact of local government debt on economic growth will produce spatial spillover (Zhao et al, 2019).…”

Section: Resultsmentioning

confidence: 99%

Analyzing the Mechanism Between Local Government Debts and China’s Economic Development: Spatial Spillover Effects and Environmental Consequences

Cai

Song

2022

Front. Environ. Sci.

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Under the new normal of economy, a series of active fiscal policies such as tax reduction and fee reduction and new infrastructure construction in China have reduced the source of local government revenue, while the expansion of fiscal expenditure and the widening gap between revenue and expenditure have further exacerbated the motivation of local governments to borrow. Using the spatial econometric model and based on the data of 30 provinces in China from 2006 to 2018, this article deeply studies the impact of local government debt on economic growth and its spatial spillover effect and discusses the regional location heterogeneity of this growth effect. The research shows that: (1) local government debt has significantly promoted regional economic growth; (2) the growth promoting effect of local government borrowing has significant spatial spillover; (3) borrowing debt has the greatest effect on promoting economic growth in the central region, followed by the east, and the west is almost unaffected. Therefore, the Chinese government needs to continue to implement an active fiscal policy, improve the promotion and assessment mechanism of local officials, and adhere to the goal of balanced regional development.

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“…Due to the availability of data, this paper chooses a provincial-level unit as the research area [45][46][47][48]. Additionally, in order to cover as many types of local government debt as possible, this paper classifies the local government debt into explicit debt and implicit debt according to Polackova's definitions [49].…”

Section: Methodsmentioning

confidence: 99%

Several explorations on how to construct an early warning system for local government debt risk in China

Chen

2022

PLoS ONE

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This paper aims to explore several ways to construct a scientific and comprehensive early warning system (EWS) for local government debt risk in China. In order to achieve this goal, this paper studies the local government debt risk from multiple perspectives, i.e., individual risk, contagion risk, static risk and dynamic risk. Firstly, taking China’s 30 provinces over the period of 2010~ 2018 as a sample, this paper establishes early warning indicators for individual risk of local government debt, and uses the network model to establish early warning indicators for contagion risk of local government debt. Then, this paper applies the criteria importance though intercrieria correlation (CRITIC) method and coefficient of variation method to obtain the proxy variable Ⅰ, which combines the above two risks. Secondly, based on the proxy variable Ⅰ, both the Markov-switching autoregressive (MS-AR) model and coefficient of variation method are used to obtain the proxy variable Ⅱ, which comprehensively considers the individual risk, contagion risk, static risk and dynamic risk of local government debt. Finally, machine learning algorithms are adopted to generalize the EWS designed in this paper. The results show that: (1) From different perspectives of local government debt risk, the list of provinces that require early warning is different; (2) The support vector machines can well generalize our EWS.

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The Effect of Local Government Debt on Regional Economic Growth in China: A Nonlinear Relationship Approach

Cited by 28 publications

References 60 publications

Spatial Analysis of Socio-Economic Driving Factors of Food Expenditure Variation between Provinces in Indonesia

Spatial Analysis of Socio-Economic Driving Factors of Food Expenditure Variation between Provinces in Indonesia

Analyzing the Mechanism Between Local Government Debts and China’s Economic Development: Spatial Spillover Effects and Environmental Consequences

Several explorations on how to construct an early warning system for local government debt risk in China

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