IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v102y2025ics1059056025005337.html
   My bibliography  Save this article

Fiscal decentralization and regional Innovation: Dual mechanisms of human capital mediation and financial development moderation

Author

Listed:
  • Ren, Haixia
  • Xian, Zhe
  • Zhu, Baorong
  • Lin, Haiying

Abstract

Fiscal decentralization, as an institutional arrangement to adjust the relationship of financial power between the central and local governments, plays a key role in ensuring regional innovation levels and high-quality economic development. This paper is based on panel data from 31 provinces in China from 2010 to 2023. It empirically explores the impact and mechanism of fiscal decentralization on regional innovation through a bidirectional fixed effects model, mediation effect model, and moderation effect model. Research finds that fiscal decentralization has a significant innovation effect, which can notably enhance regional innovation levels, and this effect is more pronounced in eastern regions and provinces with higher economic development levels. Mechanism analysis shows that fiscal decentralization indirectly affects the improvement of regional innovation levels through human capital. Further analysis reveals that financial development plays a positive moderating role in the process of fiscal decentralization enhancing regional innovation levels, not only strengthening the direct effect of fiscal decentralization but also actively moderating the indirect effect of human capital on regional innovation. This article proposes policy recommendations from the aspects of optimizing the fiscal decentralization system, strengthening human capital investment, comprehensively promoting financial development, and enhancing policy support.

Suggested Citation

  • Ren, Haixia & Xian, Zhe & Zhu, Baorong & Lin, Haiying, 2025. "Fiscal decentralization and regional Innovation: Dual mechanisms of human capital mediation and financial development moderation," International Review of Economics & Finance, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025005337
    DOI: 10.1016/j.iref.2025.104370
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025005337
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104370?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025005337. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.