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From fiscal decentralization to high-quality economic development: role of tax administration intensity

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  • Li, Meng
  • Gu, Yunlong

Abstract

This study examines how fiscal decentralization influences high-quality development in China, emphasizing tax administration's moderating role. Analyzing panel data from 279 prefecture-level cities (2007–2021), we employ fixed-effects estimation, instrumental variables, and propensity score matching to address endogeneity. Results reveal fiscal decentralization significantly enhances high-quality development, with tax administration intensity amplifying this relationship. Heterogeneity analyses along the Hu Huanyong Line, resource endowment, and urban hierarchy demonstrate that decentralization's impact varies notably across contexts, being more pronounced in southern regions, non-resource-based cities, and metropolitan areas. These findings advance theoretical understanding while providing practical insights for regional policy calibration.

Suggested Citation

  • Li, Meng & Gu, Yunlong, 2025. "From fiscal decentralization to high-quality economic development: role of tax administration intensity," Finance Research Letters, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003113
    DOI: 10.1016/j.frl.2025.107047
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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