Fiscal Decentralization, Tax Competition And Industrial Structure Upgradin

Since the reform of the tax-sharing system in 1994,China’s fiscal decentralization system has shown the characteristics of concentration of financial power to the central government and decentralization of power to the localities,and the implementation of the tax-sharing system has made the financial relationship of China’s central and local governments enter a relatively independent stage of development.At the same time,the continuous improvement of the promotion and assessment mechanism for government officials accompanied by the system has further strengthened the main responsibility of local governments in the fields of industrial upgrading and economic development,and has had a significant impact on local tax policy choices and industrial development.Therefore,it is of certain theoretical and practical significance to study the impact of fiscal decentralization on industrial structure upgrading and the role of local governments in tax competition under this system.This paper first reviews the relevant literature on fiscal decentralization,tax competition and industrial structure upgrading,and then defines the concepts of the three,introduces the relevant classical theories,and analyzes their development status.Secondly,it analyzes the mechanism of fiscal decentralization,tax competition and industrial structure upgrading.On this basis,select the provincial panel data of China from 2009 to 2020,use the entropy method to calculate the industrial structure upgrading index,and empirically test the impact of fiscal decentralization on industrial structure upgrading.Considering the differences in economic development among different regions,this paper divides the national sample into three parts: east,middle and west,and explores whether there is regional heterogeneity in the impact of fiscal decentralization on industrial structure upgrading.Finally,the intermediary variable tax competition is introduced,and the intermediary effect model is used to empirically test whether tax competition has a masking effect between fiscal decentralization and industrial structure upgrading,so as to further test the robustness of the empirical results.The results show that,first,fiscal decentralization can promote the transformation and upgrading of industrial structure,which indicates that fiscal decentralization can stimulate local governments to make policy choices to develop local economy and promote industrial upgrading.According to the results of heterogeneity analysis,the promotion effect of fiscal decentralization on industrial structure upgrading in the eastern region is weaker than that in the central and western regions.Second,from the mechanism analysis results,tax competition can promote the upgrading of industrial structure,and verify that fiscal decentralization can weaken its ability to promote the upgrading of industrial structure to a certain extent by inhibiting the tax competition among local governments.That is,there exists a masking effect between fiscal decentralization,tax competition and industrial structure upgrading.In order to better promote the economic development of our country and make better use of the important role of fiscal and taxation policies in promoting the transformation and upgrading of our industrial structure,the central government should focus on the deepening of the reform of the fiscal decentralization system,the formulation of reasonable tax policies and the improvement of other supporting Reforms...