The Impact Of Regional Fiscal Policies On The Spatial Structure Of Industry

Recently, the economy of our country has made considerable development, but we still faced with the problem of uneven distribution of industries, "core-periphery" industry pattern has formed in our country. 2015 CPPCC report put forward the development goal of the optimization of economic spatial structure clearly. Meanwhile, economic spatial structure is always a hot topic in the academic world. Scholars at home and abroad studied how the government behaviors influence the industrial spatial structure from different views, such as New Classical Economics, New Growth Theory,New New Trade Theory and so on. However, their researches had limitations in the theoretical framework, assumptions and empirical test, further studies with new perspective is needed.This paper is based on a famous and typical model of New Economic Geography Theory, Footloose Enterprise Model(FE Model for short), combined with government behaviors and firm heterogeneity in New New Trade Theory, construct a framework of "New" New Economic Geography Theory, in order to inspect how government behaviors influence the industrial spatial structure under the condition of footloose enterprises and products. The paper analyzed how two fiscal policies: tax and subsidy and two financial patterns: centralization and decentralization, influence the industrial spatial structure, through partial and general equilibrium analysis of government behaviors respectively. The paper get several theoretical conclusions as follows. Firstly, under the theoretical framework the paper set, fiscal policies for products is always effective; Secondly, fiscal policies for income is valid when the industry distribute evenly, while it is invalid when the industry is completely agglomerated; Thirdly, freedom to trade influence the industrial spatial structure according to the specific circumstances when the industry distributed evenly, and it has no influence on the industrial spatial structure when the industry is completely agglomerated. The paper analyzed the theory proposed in content empirically, by using the panel data in our country from 2000 to 2012, and using the methods of IV-GMM estimation, Stochastic Frontier Approach and Treat Effect Model with STATA software. The paper get several empirical conclusions as well. In our country, freedom to trade influence regional industrial share negatively when tax and subsidy influence the economy at the same time, indicating our country do have the phenomenon of excessive agglomeration; big region affect regional industrial share more than small region; and subsidy influence regional industrial share negatively either, indicating that decentralized fiscal policy plays an important role in our country.Through theoretical analysis and empirical test, the paper support the government with suggestions that fiscal policies should combined with the realistic state of the economy in our country when it is take into practice at the end of the paper. The government should keep reducing the trade cost and increasing the infrastructure construction. A concrete analysis of concrete problems, use the two fiscal policies carefully, so that fiscal policies could reduce the gap between regions, and balance regional industrial structure.