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Central Government's Infrastructure Investment across Chinese Regions: A Dynamic Spatial Panel Data Approach

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  • Zheng, Xinye
  • Li, Fanghua
  • Song, Shunfeng
  • Yu, Yihua

Abstract

This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central government's investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.

Suggested Citation

  • Zheng, Xinye & Li, Fanghua & Song, Shunfeng & Yu, Yihua, 2013. "Central Government's Infrastructure Investment across Chinese Regions: A Dynamic Spatial Panel Data Approach," MPRA Paper 50407, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:50407
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    More about this item

    Keywords

    Infrastructure investment; efficiency-equity tradeoff; spatial interaction;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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