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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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    4. Mototsugu Fukushige & Yingxin Shi, 2017. "Intergovernmental fiscal relationship in China: a simple model based on the nonsymmetric Nash solution," Asia-Pacific Journal of Regional Science, Springer, vol. 1(2), pages 495-509, October.
    5. Katarzyna Kopczewska, 2016. "Efficiency of Regional Public Investment: An NPV-Based Spatial Econometric Approach," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(4), pages 413-431, October.
    6. Liu, Qijun & Song, Lijie, 2022. "Do intergovernmental transfers boost intergenerational income mobility? Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 293-309.
    7. Mohanty, Biswajit & Bhanumurthy, N. R. & Dastidar, Ananya Ghosh, 2017. "What explains Regional Imbalances in Infrastructure?: Evidence from Indian States," Working Papers 17/197, National Institute of Public Finance and Policy.
    8. Zheng, Xinye & Yu, Yihua & Wang, Jing & Deng, Huihui, 2013. "Identifying the determinants and spatial nexus of provincial carbon intensity in China: A dynamic spatial panel approach," MPRA Paper 56088, University Library of Munich, Germany.
    9. Zhang, Zhenhua & Zhang, Guoxing & Su, Bin, 2022. "The spatial impacts of air pollution and socio-economic status on public health: Empirical evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    10. Biswajit Mohanty & N.R. Bhanumurthy & Ananya Ghosh Dastidar, 2017. "What explains regional imbalances in public infrastructure expenditure? Evidence from Indian states," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 24(2), pages 113-139, December.
    11. Nana Yang & Qiming Liu, 2023. "How does industrial agglomeration affect regional innovation? A spatial econometric analysis," Growth and Change, Wiley Blackwell, vol. 54(4), pages 826-852, December.
    12. Zhenhua Zhang & Guoxing Zhang & Shunfeng Song & Bin Su, 2020. "Spatial Heterogeneity Influences of Environmental Control and Informal Regulation on Air Pollutant Emissions in China," IJERPH, MDPI, vol. 17(13), pages 1-22, July.
    13. Lie Ma & Dandan Li & Xiaobo Tao & Haifeng Dong & Bei He & Xiaosu Ye, 2017. "Inequality, Bi-Polarization and Mobility of Urban Infrastructure Investment in China’s Urban System," Sustainability, MDPI, vol. 9(9), pages 1-19, September.
    14. Zekun Li & Shenjing He & Shiliang Su & Guie Li & Fei Chen, 2020. "Public Services Equalization in Urbanizing China: Indicators, Spatiotemporal Dynamics and Implications on Regional Economic Disparities," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(1), pages 1-65, November.
    15. Lihu Pan & Fenyu Yang & Feiping Lu & Shipeng Qin & Huimin Yan & Rui Peng, 2020. "Multi-Agent Simulation of Safe Livability and Sustainable Development in Cities," Sustainability, MDPI, vol. 12(5), pages 1-15, March.
    16. Wu, Yan & Heerink, Nico, 2016. "Foreign direct investment, fiscal decentralization and land conflicts in China," China Economic Review, Elsevier, vol. 38(C), pages 92-107.
    17. Yu, Jihai & Zhou, Li-An & Zhu, Guozhong, 2016. "Strategic interaction in political competition: Evidence from spatial effects across Chinese cities," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 23-37.
    18. Zameer, Hashim & Yasmeen, Humaira & Wang, Rong & Tao, Jing & Malik, Muhammad Nasir, 2020. "An empirical investigation of the coordinated development of natural resources, financial development and ecological efficiency in China," Resources Policy, Elsevier, vol. 65(C).
    19. Yongqing Nan & Qin Li & Jinxiang Yu & Haiya Cai & Qin Zhou, 2020. "Has the emissions intensity of industrial sulphur dioxide converged? New evidence from China’s prefectural cities with dynamic spatial panel models," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(6), pages 5337-5369, August.
    20. Katarzyna Kopczewska, 2017. "Kumulatywny vs. panelowy model przestrzenny w modelowaniu inwestycji lokalnych polskich gmin w latach 1995–2015," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 47, pages 113-128.
    21. Emanuele Felice & Iacopo Odoardi & Dario D’Ingiullo, 2023. "The Chinese Inland-Coastal Inequality: The Role of Human Capital and the 2007–2008 Crisis Watershed," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 761-788, July.
    22. Celbis, M.G. & Crombrugghe, D. de & Muysken, J., 2014. "Public investment and regional politics: The case of Turkey," MERIT Working Papers 2014-020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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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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