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Central government's infrastructure investment across Chinese regions: A dynamic spatial panel data approach

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  • Zheng, Xinye
  • Li, Fanghua
  • Song, Shunfeng
  • Yu, Yihua

Abstract

This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001–2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central government's investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.

Suggested Citation

  • Zheng, Xinye & Li, Fanghua & Song, Shunfeng & Yu, Yihua, 2013. "Central government's infrastructure investment across Chinese regions: A dynamic spatial panel data approach," China Economic Review, Elsevier, vol. 27(C), pages 264-276.
    • Handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:264-276
    DOI: 10.1016/j.chieco.2012.12.006
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    23. Celbis, M.G. & Crombrugghe, D. de & Muysken, J., 2014. "Public investment and regional politics: The case of Turkey," MERIT Working Papers 2014-020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    More about this item

    Keywords

    Infrastructure investment; Efficiency-equity tradeoff; Spatial interaction;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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