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ID:
182771
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Summary/Abstract |
Whereas numerous studies have evaluated the effects of public research and development (R&D) support programs and R&D tax incentives on private R&D, little is known about local governments' fiscal incentives for R&D. In this study, we build a conceptual framework to clarify the critical role of local land supply in relation to fiscal expenditure on R&D. We treat the establishment of China's nine Land Supervision Bureaus in 2006 as a quasi-natural experiment, and run a difference-in-differences regression to identify causality. The results show that local governments allocate more fiscal expenditure to R&D in response to land-use supervision, which monitors illegal land granting behaviors, and this effect is stronger in cities where leaders have higher political career incentives and cities with greater fiscal decentralization. Moreover, we find that land-use supervision increases the probability and scale of firms' access to government subsidies for R&D; thus, enhancing regional innovation capacity. Our findings document that China's land resource is a curse for its innovation-driven growth as it impedes local governments' fiscal incentives for R&D.
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2 |
ID:
179872
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Summary/Abstract |
Why are some reforms successfully adopted while others are not? This article addresses the question by exploring the variation in the adoption of China's "One-Issue-One-Meeting" reform. The reform, initiated by the central government in 2000, encourages rural villages to voluntarily adopt a new governing procedure that seeks to enhance local public goods provision. Using data from the 2005 Chinese General Social Survey, the authors find that villages with a more homogenous population measured by surname fractionalisation are more likely to adopt the procedure. Applying a generalised spatial two-stage least squares estimation, the authors also found a spatial spillover effect of the reform: the likelihood of a village undertaking the reform increases when its neighbouring villages also do so, and such effect is more pronounced if the neighbouring village is economically better off. This suggests a potential learning mechanism underlying the neighbourhood spillover.
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