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Is Local Government Intervention Effective In Promoting The Tfp Of An Old Industrial Area? — A Spatial Econometric Analysis Of Northeast China

Author

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  • ZHANHUA JIA

    (School of Geographical Science, Northeast, Normal University, Changchun Jilin, China)

  • GUOFENG GU

    (School of Geographical Science, Northeast, Normal University, Changchun Jilin, China)

Abstract

Northeast China is an important old industrial base in China that is most profoundly affected by the planned economic system. The social and economic development has the characteristics of powerful government and weak market. This study estimates total factor productivity (TFP) utilizing firm-level data of Northeast China, and analyzes the effect of government intervention on TFP growth by applying a spatial econometric model over the period 1998–2007. The results indicate that TFP is gradually increasing and spatially dependents on surrounding areas. Government intervention behavior has a negative effect on TFP in Northeast China. Specifically, the stronger the government’s intervention capacity is, the less TFP is; the higher the environmental connivance is, the less TFP is. Furthermore, government intervention produces adverse spillover effects on surrounding areas, which are caused by imitation and comparison between local governments. We also examine the relationship between traditional factors, including science and technology level, human capital, FDI and openness. The findings reveal that science and technology level, human capital, FDI and openness play positive roles in stimulating TFP growth. Science and technology produce positive spatial spillover on TFP growth, but other factors do not.

Suggested Citation

  • Zhanhua Jia & Guofeng Gu, 2021. "Is Local Government Intervention Effective In Promoting The Tfp Of An Old Industrial Area? — A Spatial Econometric Analysis Of Northeast China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 66(03), pages 933-951, June.
    • Handle: RePEc:wsi:serxxx:v:66:y:2021:i:03:n:s0217590820500319
    DOI: 10.1142/S0217590820500319
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    Cited by:

    1. Zhao‐hui Chong & Jia Liu, 2023. "The evolutionary patterns of intercity co‐invention networks in the Greater Pearl River Delta, China: A comparative analysis based on the technological intensity of industry," Growth and Change, Wiley Blackwell, vol. 54(1), pages 260-283, March.
    2. Yonghong Ma & Huili Ni & Xiaomeng Yang & Lingkai Kong & Chunmei Liu, 2023. "Government subsidies and total factor productivity of enterprises: a life cycle perspective," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 153-188, April.

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