Research On The Impact Of Fiscal Expenditure Competition On Regional Business Environment

Improving the business environment is the key breakthrough to enhance the comprehensive strength of a region.Local governments as the leader in optimizing the business environment,their competitive behavior in fiscal expenditure is crucial to the construction of business environment.Based on the perspective of government serving enterprises,this paper discussed the influence of local governments’ fiscal expenditure competition on business environment.Firstly,we defined the local governments’ fiscal expenditure competition and the business environment,and analyzed the degree of local governments’ fiscal expenditure competition and the development level and dynamic evolution characteristics of the China’s business environment.Then,the theoretical basis and mechanism of fiscal expenditure competition affecting business environment are expounded.Finally,we empirically analyzed the relationship between fiscal expenditure competition and business environment,as well as considered the impact of local transfer payment income on the relationship between them.Based on the panel data of 30 provinces in China(except Tibet)from 2011 to 2021,this paper empirically analyzed the impact of competition in the scale and structure of local government expenditure on the regional business environment,and further discussed it by region.Meanwhile,the income of local transfer payment was introduced as the adjustment variable to test the moderating effect.The empirical results showed that:(1)generally,the scale competition of fiscal expenditure significantly promoted the development level of the business environment,and the productive expenditure competition had a positive impact on the business environment but was not statistically significant,while the non-productive expenditure competition has significantly promoted the construction of a business environment;(2)from the viewpoint by regions,inter-provincial competition in the fiscal expenditure scale and structure in eastern China had a significant role in promoting the development of business environment,while both the competition in scale and structure of local government’s fiscal expenditure in the central region can not improve the development level of the business environment.The competition in the scale of local government’s fiscal expenditure and the non-productive expenditure in western China can improve the business environment,but the effect is not statistically significant,whereas the competition of productive fiscal expenditure had a significant negative effect on the development of business environment;(3)from the national level,local transfer payment income can strengthen the positive effect of the competition in the scale of fiscal expenditure and productive expenditure on the business environment,but could not moderate the impact of non-productive expenditure competition on the business environment;and(4)from the perspective of the three regions,transfer payment income in the eastern region can significantly enhance the positive relationship between the competition in the scale and structure of fiscal expenditure and the development of business environment;while the moderating effect of local transfer payments in central and western regions was not statistically significant.Finally,this paper provides feasible suggestions for the competition of local government expenditure and the sustainability of business environment optimization:(1)transform governmental functions and build a public service-oriented government;(2)conduct a reasonable competition in the scale of fiscal expenditure to improve the efficiency of fiscal expenditure;(3)optimize the structure of government expenditure and make it more scientific;and(4)treat the central transfer payment rationally and improve the financial self-sufficiency ability of local governments.