Does fiscal federalism matter for economic growth? Evidence from the United States

Özkök, Yıldız; Çütçü, İbrahim

doi:10.1080/00036846.2021.1998337

Cited by 7 publications

(4 citation statements)

References 36 publications

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“…This study utilizes balanced panel data from 2009 to 2020 across 31 Chinese provinces, including municipalities under the central government, to examine the influence of climate risk on local education expenditure via a spatial error model. Our findings regarding the stimulation of education expenditure by climate risks align with the growing emphasis in the literature on the importance of proactive engagement from governments and organizations in addressing climate risks (Wang et al, 2020;Özkök and Çütcü, 2022). The observed trend underscores the critical role of heightened climate risk awareness in driving increased investment in education, a point emphasized in prior studies advocating for adaptive spending to confront the multifaceted threats posed by climate change (Bachner and Bednar-Friedl, 2019).…”

Section: Discussionsupporting

confidence: 79%

Regional climate risks and government education expenditure: evidence from China

Gao,

Rong,

Cao

et al. 2024

Front. Energy Res.

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Faced with the impact of climate risks, what responses do local governments make, particularly in the domain of social public policy? This study uses provincial panel data from China from 2009 to 2020 to investigate how climate risks affect local government education expenditure and its mechanisms. Analysis using spatial econometric models reveals the following. First, local climate risks significantly increase government education expenditure. This conclusion remains consistent across different proxy variables, model specifications, and estimation methods. Additionally, there is a spatial dependency on local government education expenditure, meaning that educational spending in neighboring areas positively influences the education expenditure of a specific location. Second, further mechanism analysis shows that climate risks lead to credit easing and drive the digital economic transformation of a location, thereby increasing its education expenditure. Third, considering the heterogeneity in the spatial dimension, it is found that this positive impetus exists only in the economically more developed eastern region. This study provides insights into understanding how the Chinese government responds to the impact of climate risks and its fiscal policy choices.

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Section: Discussionsupporting

confidence: 79%

Regional climate risks and government education expenditure: evidence from China

Gao,

Rong,

Cao

et al. 2024

Front. Energy Res.

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“…Instead of directly competing with China in regions where China already has significant influence, the US may use a strategy of multilateral cooperation with its partners [ 36 ]. Fiscal decentralization and empowering the US local governments may have a positive impact on economic performance to design effective policies for the resilience of the US economy [ 33 ].…”

Section: Resultsmentioning

confidence: 99%

“…The insights derived from this research can be useful for policymakers to effectively anticipate the security implications of economic and trade policies, thereby contributing to the principles of fiscal federalism for addressing economic vulnerabilities and strengthening the resilience of the economy by leveraging the advantages of decentralization, resource allocation, innovation and competition (see, e.g., Ref. [ 33 ]).…”

Section: Introductionmentioning

confidence: 99%

Quantifying economic vulnerabilities induced by interdependent networks

Pourshahabi,

Shutters,

Muneepeerakul

2024

PLoS ONE

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Under economic globalization, countries are linked through trade and investments. This economic interdependence creates vulnerabilities. The indirect vulnerability induced by interdependent networks of trade and investments can put a country’s economy at risk, but this risk has yet to be systematically quantified and investigated. In this paper, we developed the novel Potential Indirect Vulnerability Index (PIVI) to capture how interdependencies between networks of trade and foreign direct investment (FDI) may induce economic vulnerabilities. The model consisted of three main components: a target country (the importer of goods), an investing country (the exporter of FDI), and the intermediary countries that export commodities to the target country and receive FDI from the investing country, serving as conduits of the vulnerabilities caused indirectly by the investing country. The PIVI quantifies the indirect vulnerabilities based on the product of two fractions: 1) the dependency of the target country on commodities from each intermediary country; and 2) the dependency of each intermediary country on FDI from the investing country. We demonstrated the utility of PIVI by examining the US economy’s vulnerability to China using 2019 trade and FDI data. Several Asian countries and a mix of agricultural products and raw materials were identified as conduits through which China could potentially influence the US economy. Vietnam was a sizeable risk because, while it has been a primary source of many US imports, it also received about 30% of its FDI from China. The US policy makers might opt to increase diversity in trade partners or to promote investment in countries such as Vietnam. We also applied the PIVI analysis to critical minerals, identifying cobalt, tungsten, and copper as the most vulnerability-inducing among them. PIVI is a flexible metric than can be aggregated and modified to provide a more nuanced and focused assessment of an economy’s vulnerability.

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“…Additionally, Özkök et al discussed how fiscal federalism improves macroeconomic performance by enhancing the efficiency and performance of the public sector. While this study does not directly involve member countries of the Turkish Council of Cooperation, its results provide valuable reference [ 18 ]. Fiscal federalism can be seen as a form of national governance mechanism, enhancing government efficiency and performance through decentralization and collaboration, thereby promoting the economic development of the country.…”

Section: Introductionmentioning

confidence: 99%

Analysis of human capital effects introducing Bayesian quantile regression in the process of industrial structural upgrading

Shi,

Wang

2024

PLoS ONE

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In recent years, with the continuous evolution of the global economy and the adjustment of industrial structures, the understanding of the role played by human capital in the process of economic development has become particularly important. However, existing research on the impact of human capital on economic growth often adopts traditional regression methods, failing to comprehensively consider the heterogeneity and nonlinear relationships in the data. Therefore, to more accurately understand the influence of human capital on economic growth at different stages, this study employs Bayesian quantile regression method (BQRM). By incorporating BQRM, a better capture of the dynamic effects of human capital in the process of industrial structure upgrading is achieved, offering policymakers more targeted and effective policy recommendations to drive the economy towards a more sustainable direction. Additionally, the experiment also examines the impact of other key factors such as technological progress, capital investment, and labor market conditions on economic growth. These factors, combined with human capital, collectively promote the upgrading of industrial structure and the sustainable development of the economy. This study, by introducing BQRM, aims to fill the research gap regarding the impact of human capital on economic development during the industrial structural upgrading process. In the backdrop of the ongoing evolution of the global economy and adjustments in industrial structure, understanding the role of human capital in economic development becomes particularly crucial. To better comprehend the direct impact of human capital, the experiment collected macroeconomic data, including GDP, industrial structure, labor skills, and human capital, from different regions over the past 20 years. By establishing a dynamic panel data model, this study delves into the trends in the impact of human capital at various stages of industrial structure upgrading. The research findings indicate that during the high-speed growth phase, the contribution of human capital to GDP growth is 15.2% ± 2.1%, rising to 23.8% ± 3.4% during the period of industrial structure adjustment. Technological progress, capital investment, and labor market conditions also significantly influence economic growth at different stages. In terms of innovation improvement, this study pioneers the use of BQRM to gain a deeper understanding of the role of human capital in economic development, providing more targeted and effective policy recommendations. Ultimately, to promote sustainable economic development, the experiment proposes concrete and targeted policy recommendations, emphasizing government support in training and skill development. This study not only fills a research gap in the relevant field but also provides substantive references for decision-makers, driving the economy towards a more sustainable direction.

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Does fiscal federalism matter for economic growth? Evidence from the United States

Cited by 7 publications

References 36 publications

Regional climate risks and government education expenditure: evidence from China

Regional climate risks and government education expenditure: evidence from China

Quantifying economic vulnerabilities induced by interdependent networks

Analysis of human capital effects introducing Bayesian quantile regression in the process of industrial structural upgrading

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