Research On The Differences And Spatial Effects Of Regional Fiscal Capacity In China Between Cities Of Prefecture Level And Above

With the deepening of market economic reform, China's economic and social development has made remarkable achievements in the world. But we also should pay attention the fact that the difference of the level of economic development between regions in China is extreme, such as when China's GDP is the world's second-biggest, some areas still exists the phenomenon of regional overall poverty. As financial capacity is part of the regional comprehensive economic strength, so financial differences between regions in China also is a problem which need to solve, and it is one of the policy objectives to be considered by the government to reduce the difference of financial resources between regions. Financial disparity is always one of the focus of academic research, but in previous studies, the research objects are often provincial differences, and the differences of prefecture level city and above is seldom involved. In addition, there are almost no literature which used the method such as ESDA to analysis the pattern of financial capacity. So this paper uses the ESDA method to study the financial differences and their spatial effect between prefecture level and above cities.This paper combines the two aspects of income and expenditure, using the method such as ESDA and the spatial econometric methods to study the financial differences and their space effect which is based on the data of 284 prefecture level and above cities from 2004 to 2013. Firstly, the financial differences between China's prefecture level and above cities show pyramid structure whose top both are high level financial cities from the absolute index, the financial differences between prefecture level and above cities have a declining trend from the relative indicators. Moreover, the results of the Gene coefficient decomposition of the difference of the financial resources show that:business tax, corporate income tax and value added tax difference are three main causes for the difference of the financial resources in income level, and because of changes in the statistical items, difference contribution of basic construction expenditure and general public service are the highest during different period. Then, the results of the study of the spatial effect and its influencing factors of regional financial disparity show that:the spatial positive correlation of financial level of prefecture level and above cities, and the results of the local spatial correlation are mainly "L-L" agglomeration, and six factors have the positive correlation with financial resources of prefecture level and above cities, and the factors are per capita GDP index, the secondary industry accounted for, the proportion of foreign trade dependence degree, whole society fixed assets investment, financial self-sufficiency coefficient and fiscal revenue decentralization, when the population density has a negative correlation with financial level, there are four factors have the positive correlation with financial resources of prefecture level and above cities, which are per capita GDP index, per capita income of the general budget, foreign trade dependence degree and the per capita expenditure decentralization.