The Identification of the Financial Competition of Local Governments in Xia.pdf

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The Identification of the Financial Competition of Local Governments in Xia.pdf

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The Identification of the Financial Competition of Local Governments in Xia

53 Copyright ? Canadian Research Development Center of Sciences and Cultures ISSN 1923-841X [Print] ISSN 1923-8428 [Online] International Business and Management Vol. 5, No. 2, 2012, pp. 53-60 DOI:10.3968/j.ibm.1923842820120502.ZR039 The Identification of the Financial Competition of Local Governments in Xia Zhang Quan Metropolitan Area: Does “the Horizontal Strategic Interaction” Coexist with “the Vertical Common Action”? LIU Shanshan[a],*; MU Lin[b]; LIU Lingrui[c] [a] Lecturer, Doctor of Economics, mainly engaged in regional planning and industrial organization. Tan Kah Kee College, Xiamen University, 363105, China. [b] Tan Kah Kee College, Xiamen University, 363105, China. [c] School of Management, Xiamen University, 363105, China. *Corresponding author. Supported by Young Doctor Project of Provincial Social Sciences Plan, Fujian (No. 2011C046); Subjects in Humanities and Social Sciences of the Provincial Education Department, Fujian (No. JA11323S); General Project of Provincial Social Sciences Plan, Fujian (No. 2011B217); Special Fund for Research of the Central Universities (No. 2010221056); General Project of Economics in Zhangzhou Philosophical and Social Scientific Research, 2012 (No. 18). Received 10 September 2012; accepted 12 November 2012 Abstract Using the spatial autoregressive model and spatial error correlation model, we have an empirical test on the financial competition of the 19 local governments in Xia Zhang Quan metropolitan area to identify the characteristics of “the horizontal strategic interaction” behavior and “the vertical common action” behavior. The results of our study show that the characteristics of interaction in the relative size of tax, the relative size of expenditure, the expenditure for capital construction and the expenditure on education of the 19 local governments are in the tactics of mutual mimicking. And in the characteristics of the vertical common action, the 19 local governments have followed the