| China's industrial structure has gradually stepped into the late stage of industrialization from the early stage of industrialization in the late 1970s.Whether measured by the proportion of output or the proportion of employment,it generally presents a Kuznets fact.In order to better explain the change of China's industrial structure,it is very important to find the institutional arrangement with Chinese characteristics to support the transformation and upgrading of industrial structure,especially to understand the important role played by local governments.At the same time,the local government's decision-making and behavior choice cannot be separated from the financial support,especially the Chinese decentralization system and pattern endows the local government with the residual claim right and promotes the local government's competition in the industrial development,which makes the change of the industrial structure deeply affected by the local government's financial revenue and expenditure.Especially after the tax sharing reform in 1994,the characteristics of "revenue centralization and expenditure decentralization" became more obvious,which was a watershed for local governments in terms of both fiscal absorption capacity and public responsibilities.Since the reform of the tax sharing system,the financial power has been collected at different levels,while the administrative power has been transferred at different levels.Local governments have no main source of tax,so the financial revenue and expenditure behavior of local governments has naturally become a research hot topic.Therefore,without a deep understanding of local government policies and behaviors,especially fiscal revenue and expenditure behaviors,it is difficult for us to understand some important characteristics of industrial structure change.From the perspective of fiscal expenditure,after the reform of tax sharing system,the scale of local government expenditure scale has gradually expanded,and the Flypaper Effect of fiscal transfer payment further aggravates this phenomenon,which leads the local finance to becoming a "financial eating",reduces the administrative efficiency of local government,and profoundly affects the industrial development.From the perspective of fiscal revenue,the mismatch between financial power and administrative power,and Chinese-style land management system lead to the formation of a land-centered revenue generation model for local governments,that is,land finance and land financing,and the behavior preference of local governments based on land largely determines the direction and intensity of the industrial structure change.On the one hand,the two hand land supply strategy of the local government under the land finance behavior leads to the rigidity of the industrial structure and the virtual height of the industrial structure,and the dependence of local governments on land finance is probably the important incentive that leads to the coexistence of China's rapid economic growth and the lagging upgrading of service industry structure;on the other hand,after the 2008 financial crisis,the income generation model based on land finance due to institutional causes and macroeconomic fluctuations could not fully meet the needs of local governments to promote industrial upgrading and accelerate the economic development of their jurisdictions,thus making land financing an important reason for the debt accumulation of local governments.However,the local government debt formed under the land financing model will further affect the industrial structure's height and rationalization.Although "expenditure is determined by revenue" has adapted to the needs of the planned economic system,with the gradual maturity of the market economic system,the fiscal revenue and expenditure system after the reform of the tax sharing system is more suitable to be described as "revenue is determined by expenditure".In view of this,based on the perspective of local government financial revenue and expenditure,this paper analyzes its influence on the change of China's industrial structure and its mechanism from the three dimensions of local government expenditure scale,land finance behavior and local government debt under the land financing model.In terms of research methods,this paper is based on relevant economic theories and frontier literature at home and abroad,combining comprehensive literature induction with historical analysis,normative analysis with empirical analysis,comparative analysis and other methods.The main research contents and conclusions are as follows:Firstly,based on the perspective of fiscal expenditure,this paper establishes a multi-factor Panel Smooth Transition Regression(PSTR)model to empirically test whether the local government expenditure size have the non-linear effect with the urban industrial structure.The results show that the two variables exist a significant threshold effect and they also have a continuous and smooth translation mechanism.Simultaneously,the positive effect of the local government expenditure size on industrial structure upgrading will be weaken with the gradual improvement of economic development level,but the final effect will be negative when the local government expenditure size is excessively expanded.The method of changing variable measure and the heterogeneity analysis verify the basic conclusion again.The result of further mechanism test shows that the local government expenditure size is influenced by the positive investment wave phenomenon and the negative innovation drive effect on the urban industrial structure.Secondly,from the perspective of fiscal revenue,this paper studies the impact of land finance behavior of local government on the structural upgrading of service industry.Compared with developed countries and some emerging market countries,China's rapid economic growth has lagged behind the upgrading of the service industry structure.This paper attempts to explain this paradox from the perspective of land finance revenue and expenditure behavior of local government under the decentralization system,and conducts empirical tests by using SYS-GMM estimation method and mediation effect model.The study found that the increased dependence of local governments on land finance would significantly inhibit the structural upgrading of producer services and high-end services,and further interaction found that the higher degree of fiscal decentralization and marketization would significantly weaken this negative impact.Under the condition of adding control variables that may interfere with the estimation results and replacing indicators and samples,the conclusion is still robust.The result of subsample regression shows that the negative effect of land finance on service industry structure upgrading is more obvious in the central and western regions and after the 2008 financial crisis.In addition,the results of the intermediation mechanism test show that land finance will cause misallocation of land resources and imbalance of urbanization,and restrain innovation,eventually leading to the lag of the upgrading of service industry structure.Finally,the rise of the land financing model has led to a huge accumulation of local government debt,especially after 2008,when local governments relied on local government financing vehicles(LGFVs)to obtain debt(mainly borrowing)at an unprecedented scale and speed.the rapid expansion of local government debt has attracted wide attention,and the industrial structure effect caused by debt expansion is often unclear in existing researches.This paper creatively sums up the debt data of LGFVs from 2005 to 2014 to the city level and discusses the impact of local government debt on the transformation and upgrading of industrial structure and its internal logical mechanism.It is found that there is a significant inverse-U shape relationship between debt expansion and the upgrading and rationalization of industrial structure.That is to say,moderate debt scale can promote the upgrading and rationalization of industrial structure,but excessive expansion will inhibit it.After several robustness tests and endogeneity problems such as changing estimation methods and constructing instrumental variables,the conclusion is still valid.From the perspective of industry segmentation,the internal characteristics of industrial structure measured by employment share also support this argument.Heterogeneity analysis shows that this effect significantly exists in high debt provinces while in low debt provinces it mainly affects the rationalization level of industrial structure,moreover,the negative impact is mainly reflected after the financial crisis of 2008.Further mechanism analysis shows that debt expansion acts on the urban industrial structure through positive tidal effect of infrastructure investment and negative factor price distortion effect,resulting in an inverted-U shape relationship throughout the sample period.To sum up,this paper considers that the transformation of China's industrial structure needs to be researched from the perspective of local government revenue and expenditure in combination with the institutional background of Chinese decentralization,so as to better explain it.Based on the above research conclusions,the following policy implications can be obtained:firstly,from the perspective of local government size,it is necessary to optimize the structural changes under the given financial resources of the government,curb the excessive expansion of]ocal government size,optimize the service reform,streamline the organization,reduce the redundant staff,and accelerate the transformation of government functions.Secondly,from the perspective of the land finance dimension under the revenue generation behavior of local governments,it is necessary to timely reform the land requisition and transfer system and weaken the economic growth target assessment,so as to reduce the short-sighted and distorted behavior of local governments.Finally,from the perspective of land financing in the context of local governments' income-generating behaviors,we need to have a correct understanding of local government debt.While reasonably adjusting the inter-governmental financial distribution relationship and minimizing the institutional causes of excessive local government debt expansion,we need to take full account of regional differences to prevent and defuse debt risks.The innovation of this paper is mainly reflected in the following two aspects:Firstly,research perspective innovation.Under the Chinese-style decentralization system,on the one hand,there are relatively few studies on the role of local government's decision-making and behavior preferences in the industrial structure change,and no systematic empirical research and theoretical elaboration;on the other hand,most of the existing researches based on the perspective of fiscal revenue mainly focus on the effect of tax on industrial structure,but seldom consider the rational choice and behavioral preference of local governments to increase their own fiscal revenue under the decentralization system.Therefore,different from the existing research perspective,the perspective of fiscal revenue and expenditure in this paper is mainly based on the background of Chinese decentralization system,and more attention is paid to the fiscal revenue and expenditure behavior of local governments.In view of this,this paper takes the local government as the starting point of the research,takes the financial revenue and expenditure of the local government as the main line,analyzes the impact of the expenditure scale of the local government and the income generation behavior of the local government based on land(land finance and land financing)on the change of the industrial structure and its mechanism.The research work of this paper can clarify the debate on the effectiveness of local governments in the changes of industrial structure to a certain extent,make up for the inadequacy of the existing theoretical analysis and empirical research,and provide a new and systematic research perspective and analysis framework for the causes of the industrial structure change in China.Secondly,innovation of research content and mechanism.Specifically,chapter 4 of this paper deepens the perspective of fiscal expenditure from the dimension of local government size,and verifies the non-linear characteristics between local government scale change and urban industrial upgrading by constructing the multi-factor Panel Smooth Transition Regression(PSTR)model.Chapter 5 innovatively constructs a simple three sector dynamic non-equilibrium growth model,and studies the impact of local government's income generating behavior based on land finance on the upgrading of service industry structure from the theoretical and empirical aspects,which shows that the dependence of local government on land finance is an important incentive for the coexistence of high-speed economic growth and lagging upgrading of service industry structure in China.In Chapter 6,based on the different dimensions of industrial structure's height and rationalization,and using the local government debt data closer to the real level,this paper analyzes the industrial structure effect caused by debt expansion.The theoretical analysis and empirical test of each chapter is not only an effective expansion of the existing research,but also a further innovative test of its specific transmission mechanism,so as to provide policy recommendations for promoting the transformation and upgrading of China's current industrial structure from the perspective of local governments according to the detailed research conclusions. |
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