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Education expenditure in China: potential strategic behavior among regional governments

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  • Yanqing Jiang

Abstract

In this study, we examine whether significant strategic interaction exists among Chinese provincial governments in determining the levels of their expenditures on education. The presence of such spatial interaction may be either due to spatial spillovers or due to spatial resource flows between provinces. We derive our basic regression specification based on the theoretical models in the literature. By applying a panel data generalized method of moments (GMM) method, we show that under a ‘smooth-distance-decay’ assumption in constructing the weighting scheme for the relevance of interaction between two provinces, our regression results provide evidence that supports the claim that there exists significant inter-provincial strategic interaction in public expenditure for education among the Chinese provinces.

Suggested Citation

  • Yanqing Jiang, 2015. "Education expenditure in China: potential strategic behavior among regional governments," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 13(3), pages 233-246, August.
  • Handle: RePEc:taf:jocebs:v:13:y:2015:i:3:p:233-246
    DOI: 10.1080/14765284.2015.1021113
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