Will The Transfer Payment Have An Impact On Regional Industrial Structure

After the tax reform in 1994,the crisis has been removed and the central government has controlled the financial income.As the important institution of fiscal decentralization,transfer payment has taken more and more attention.With the speed of economic growth slowing down and the industrial structure changing,how to understand the relationship of these conceptions is a problem to be solved.This paper investigates the effect of transform payment on the weight between the second industry and the third industry.We also study the matching between labor force and industries.Now,China is changing the industrial structure and improving the quality of economy.We focus on Chinese industrial structure under the institution of transform payment.By using Chinese industries data from 2000 to 2016,we construct theoretical model and empirical model.We studied the impact of the local governments’competition on local industries and the matching level between local industries and labor force by C-P model of Krugman.We use instrumental variable to solve the problem of endogeneity.The research results implicates the transform payment would distort the relationship of the resource using in the second and third industry because of the mismatching between the fiscal and expenditure right of local government.For labor force and industries,transform payment would affect the matching level by public service.