REN Zhicheng，etc：Fiscal Decentralization, Local Government Competition and Export Growth in the Provincial Level

Abstract：The miracle of Chinese export growth is supported by the regional export growth in the provincial level. This paper elaborates the theoretical logic that fiscal decentralization and local government competition promote the export growth of Chinese provinces. This paper also uses the panel data of Chinese 29 provinces from 2002 to 2012 and from 1994 to 2012 to identify the promotion effect of these two institutional factors. The empirical results state that, fiscal decentralization as the economic incentive factor which is represented by the system of tax sharing, and local government competition as the political incentive factor which is featured as promotion tournament, both significantly improve Chinese export growth directly in the provincial level. This effect does not change with the China's entry of WTO in 2001. Because of the internal relation between these two factors, fiscal decentralization improves the export growth in the provincial level indirectly via local government competition. These results are robust when using the expenditure approach and the income approach to measure the variable of fiscal decentralization.

Key words： Fiscal Decentralization    Local Government Competition    Export

source:Finance & Trade Economics ,No.7,2015