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Growth versus equity: the effects of centralized fiscal transfers on Chinese provinces

Ong, Kian, Matthews, Kent ORCID: and Wang, Baoshun 2023. Growth versus equity: the effects of centralized fiscal transfers on Chinese provinces. Regional Studies 57 (11) , pp. 2307-2322. 10.1080/00343404.2022.2160868
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Centralized fiscal transfers to the provinces are the principal means of reducing income inequalities in China. The coastal provinces are the main transfer donors to the poorer provinces. We evaluate if the equity objective sacrifices aggregate growth using four panel vector auto-regressions (PVARs) for four geographical regions of Chinese provinces. The PVARs are estimated for centralized transfers, government spending, taxes and output from 1994 to 2018, whether or not transfers sacrifice growth depends on geography. Transfers reduce inequality and generate growth in the middle provinces; reduce inequality but sacrifice growth in the western provinces; and worsen inequality and sacrifice growth in the northeast provinces.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Publisher: Taylor and Francis Group
ISSN: 0034-3404
Funders: ESRC/ES/P004199/
Date of First Compliant Deposit: 2 March 2023
Date of Acceptance: 16 December 2022
Last Modified: 07 Nov 2023 15:57

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