Research On The Impact Of Fiscal Expenditure On Spatial Distribution Of FDI

Since the reform and opening up,the Chinese government has issued a series of policies to encourage the inflow of foreign capital,the steady growth of China's FDI inflows,has gradually become one of the world's most attractive investment destination.However,in the scale of FDI increased rapidly at the same time,FDI in the China area showing the distribution of the two grade uneven,the specific performance of the FDI is more than 80%Chinese into the eastern region and the central and western regions of the absorption,into the scale of FDI is far lower than the Eastern region.Foreign enterprises in China to choose the location,the local government's investment policy has a significant impact on it.Since the reform of the tax system in 1994,the local government has launched a fierce financial competition to attract FDI inflows,which affects the location choice of FDI in China,and also affects the spatial distribution of FDI in china.Since 2008 the integration of the implementation of a "fiscal expenditure,is increasingly important in the local government competition,and gradually become the main means of local government fiscal competition.Therefore,the research on the impact of local government fiscal expenditure on FDI has important reference significance for local government and central government.There are a large number of domestic literature to analyze the impact of local government fiscal expenditure on FDI in different angles.However,at present,there are no scholars to analyze the impact of local government fiscal expenditure on FDI from the perspective of space,and most of the research on FDI spatial effect is only in the spatial spillover effect.This paper argues that,due to the existence of inter regional financial competition,the policy of attracting foreign investment in a region is likely to have a significant impact on the FDI of the surrounding areas.Therefore,the test of the existence of the spatial effect and analysis of its role,enrich the theoretical system of financial competition and FDI,to make up for gaps in the relevant research in this part.This paper is divided into five chapters,the first chapter is the introduction part,mainly introduces the research background and significance,combing the research conclusion of the related literatures,and summarized the research purpose and innovation of this article;the second chapter is the theoretical basis and analysis framework,mainly reviews the development of FDI,location choice theory and local government the competition theory of constructing the theoretical model and theoretical prediction;the third chapter describes the structural changes of China absorption and distribution,local fiscal competition and the development of space FDI development and local government fiscal expenditure;the fourth chapter is the empirical part,analysis the main empirical test,according to the theoretical assumptions in the second chapter,the results of fifth;chapter is the conclusion and policy recommendations.The main content of this paper is divided into two parts:theoretical analysis and empirical test.In theory,this reference to the Baldwin,Okubo(2006)of the theoretical framework,and introduces the financial expenditure behavior of local government in the model analysis,found an area of local government expenditure has important influence on the capital's location choice,so the local government fiscal expenditure also affect the local and surrounding areas into the FDI.In the empirical analysis,this paper uses Elhorst(2014)spatial econometric analysis framework to test the model and empirical analysis based on the data of 1998-2013 in china.The empirical results show that there are significant effects of local government expenditure on the surrounding area of FDI,and the deterioration of FDI in China's two stage differentiation;from a national perspective,the rise of the local government expenditure on inhibition of FDI inflow;income tax sharing reform in 2001 China implementation,alleviate the local government revenue to FDI two grade deterioration.According to the empirical results of this paper,the local government's tax competition behavior is an important cause of the two grade FDI differentiation,but a reasonable tax reform and tax distribution system can alleviate the deterioration of fiscal expenditure.To this end,this paper put forward the following suggestions:(1)the establishment of the system of tax distribution reasonably,improve local government revenue,is conducive to curb the financial competition of malignant,improve investment efficiency from the global financial expenditure;(2)local consumer demand and labor quality has significant positive externalities on the surrounding area,the central government should reasonably guide the local government fiscal expenditure structure adjustment of local government expenditure,and put more financial resources to increase domestic demand and local labor level.