Spillover effects of taxes on government debt: a spatial panel approach

Kopczewska, Katarzyna; Kudła, Janusz; Walczyk, Konrad; Kruszewski, Robert; Kocia, Agata

doi:10.1080/01442872.2016.1146246

Cited by 11 publications

(6 citation statements)

References 23 publications

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“…The current literature on local government debt mainly focuses on its various influencing factors: globalization (Kim et al [34]); monetary (Andolfatto and Martin [35]); the number of special districts in a county (Faulk and Killian [36]); corruption (Liu et al [37]); fiscal policy (Cassou et al [38]); intergovernmental transfers (Lu and Zhong [39]); local governments' behavior (Li and Liang [40]); taxes (Kopczewska et al [41]); etc.…”

Section: Local Government Debt and Environmental Pollutionmentioning

confidence: 99%

Research on Financial Pressure, Poverty Governance, and Environmental Pollution in China

Zhang

Zhao

2018

Sustainability

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The traditional environmental governance theory attributes pollution to the result of market failure, but ignores the institution-level factors and the possibility of government failure. Using provincial panel data from 2001 to 2016 in China, and by drawing impulse response function graphs and building PVAR models, this paper studies the financial pressure and poor governance effect on environmental pollution. Financial pressure represents fiscal decentralization and debt pressure. The study finds that the increase of fiscal autonomy brings about the reduction of various types of pollutant emissions; the expansion of the scale of government debt causes very large pressure on the local governments to repay their debts and exacerbates environmental pollution in order to obtain debt repayment funds. For a long time, there was indeed a phenomenon in China in which the goal of reducing poverty was achieved at the cost of the environment. However, since 2012, the reduction of the poverty-stricken population has brought about a good trend of reducing emissions of various types of pollutants. There are no "PPE vicious circles" and "environmental traps" in China. There has been no contradiction between poverty reduction and the green development strategy implementation since 2012. There is a win-win trend in the process of environmental protection and poverty governance in China.

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Section: Local Government Debt and Environmental Pollutionmentioning

confidence: 99%

Research on Financial Pressure, Poverty Governance, and Environmental Pollution in China

Zhang

Zhao

2018

Sustainability

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“…In terms of local government revenue competition, local governments tend to drive regional economic growth through tax competition and land finance competition. Tax bottom-to-bottom competition is a competitive tool used by local governments to attract investment, but if local governments rely excessively on attracting investment through tax incentives, it will lead to an imbalance in regional fiscal balance and eventually local governments will have to raise debt (Ihori and Yang, 2009;Borck et al, 2015;Kopczewska et al, 2016). Fiscal decentralization results in stronger intergovernmental competition and lower tax rates (Crowley and Sobel, 2011).…”

Section: Intergovernmental Competition and Local Government Debt Riskmentioning

confidence: 99%

The impact of fiscal decentralization and intergovernmental competition on the local government debt risk: Evidence from China

Huo

Yin

2023

Front. Environ. Sci.

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Based on the data of explicit debt and implicit debt of local governments in China from 2012 to 2020, this paper theoretically analyzes and empirically tests the spatial correlation effect of fiscal decentralization and intergovernmental competition on local government debt risk. It’s found that local government debt risk has obvious inertia effect in time and positive spatial correlation effect in space, and local fiscal spending decentralization and intergovernmental competition have a significant positive impact on the local government debt risk, as well as a positive spatial spillover effect. The research of this paper has very important policy implications for perfecting China’s decentralization system, standardizing the competition among governments, and preventing and defusing local government debt risks.

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“…For example, Pan et al (2017) pointed out that competition among local governments is the major reason for the enlargement of the government debt scale and that the competition mechanism allows the government to offer financial guarantees for the promotion of local economic improvement by continuously increasing the debt scale. Furthermore, Kopczewska et al (2016) analysed the strategic borrowing game between local governments in terms of tax competition, indicating that both local taxes and government debt are spatially dependent. Moreover, some scholars have discussed the spatial correlation between local government debt and environmental quality at the macro level and suggested that an increase in the level of local government debt leads to an increase in the debt level of neighbouring countries and regions, and vice versa (Baskaran, 2012;Borck et al, 2015;Balaguer-Coll et al, 2016;Coll and Toneva, 2019).…”

Section: Spatial Effect Of Local Government Debt On Environmental Pol...mentioning

confidence: 99%

Spatial and nonlinear effects of local government debt on environmental pollution: Evidence from China

Huang²,

Du³

2022

Front. Environ. Sci.

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As a way for the government to integrate funds and make up for fiscal deficits, bond issuance plays an important role in environmental governance and thus impacts environmental quality. Based on the panel data of 30 provinces in China from 2011 to 2019, this study utilizes spatial econometric and threshold panel models to investigate the influence of local government debt on environmental pollution. The empirical results are as follows: 1) Both environmental pollution and local government debt have a significant positive spatial agglomeration effect. 2) The relationship between local government debt and environmental pollution presents a nonlinear U-shaped curve. Specifically, when the debt scale is less than the threshold value, local government debt plays a role in restraining environmental pollution, and when the debt scale exceeds the threshold value, the influence of local government debt on environmental pollution plays a promoting role. 3) A regional heterogeneity test suggests that in the eastern region, the influence of local government debt on environmental pollution is always restraining, while in the central and western regions, this influence is consistent with the national level, showing a U-shaped feature. This study provides a reference for policy-makers in improving environmental quality from the perspective of local government debt. Policy-makers should keep the scale of government debt within a moderate range to avoid the deterioration of environmental quality caused by excessive debt.

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Spillover effects of taxes on government debt: a spatial panel approach

Cited by 11 publications

References 23 publications

Research on Financial Pressure, Poverty Governance, and Environmental Pollution in China

Research on Financial Pressure, Poverty Governance, and Environmental Pollution in China

The impact of fiscal decentralization and intergovernmental competition on the local government debt risk: Evidence from China

Spatial and nonlinear effects of local government debt on environmental pollution: Evidence from China

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