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Economic Decentralization and High-Quality Urban Development: Perspective from Local Effect and Spatial Spillover in 276 Prefecture-Level Cities in China

Author

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  • Yiming Li

    (School of Economics and Trade, Shandong Management University, Jinan 250300, China
    These authors contributed equally to this work.)

  • Liru Bai

    (School of Economics and Trade, Shandong Management University, Jinan 250300, China
    School of Public Finance and Taxation, Central University of Finance and Economics, Beijing 102206, China
    These authors contributed equally to this work.)

Abstract

The advancement of high-quality urban development is of paramount importance for the enhancement of sustainable development and competitiveness at the city level. The economic decentralization system represents a pivotal institutional driving force in this regard. This paper examines the impact of decentralization on the high-quality development of Chinese cities. It constructs the high-quality urban development index ( H U D I ) through the entropy weight method and analyzes the mechanisms and spatial correlations between fiscal and financial decentralization on the high-quality development of cities through the establishment of panel and spatial regression models. The findings indicate that fiscal and financial decentralization exert a positive influence on urban high-quality development. However, the two forms of decentralization do not exhibit synergies but rather exert an inhibitory effect on one another. Furthermore, decentralization has a considerable positive spatial spillover effect on urban high-quality development. Heterogeneity analyses demonstrate that the impact of the economic decentralization system varies across different regions, reform periods, and cities with varying administrative levels. The robustness test of this paper provides further evidence of the reliability of the research findings. This paper offers theoretical support and policy recommendations for optimizing economic decentralization systems and promoting high-quality urban development.

Suggested Citation

  • Yiming Li & Liru Bai, 2024. "Economic Decentralization and High-Quality Urban Development: Perspective from Local Effect and Spatial Spillover in 276 Prefecture-Level Cities in China," Sustainability, MDPI, vol. 16(22), pages 1-33, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:22:p:9874-:d:1519432
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    1. Zhang, Yunbin & Zhao, Shiyuan, 2025. "The synergistic effect of financial development and fiscal education expenditure: A contribution pathway to high-quality economic growth," Finance Research Letters, Elsevier, vol. 86(PG).

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