Does Fiscal Spending Affect TFP? Evidence from Chinese Provinces
YING HE,
Zhan Li,
Zitong Xu
Abstract:This paper utilizes the Bartik instrument to examine the impact of provincial government spending on TFP growth in China. Our analysis reveals a noteworthy relationship: a 1% increase in provincial government spending variable over 2-year horizon would on average lead to a 0.85% increase in TFP growth during 2001–2009 and a 0.25% decrease during 2010–2018. This disparity can be attributed to the varying effects of fiscal spending on above-scale industrial enterprises, which are influenced by change in access t… Show more
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