The Impact of the China's Province-Managing-County Reform on Economic Growth in the Short Term and Long Term

Lingjing Wu
2017 Modern Economy  
We use panel data from 1995 to 2012 to examine the causal relationship between the China's province-managing-county reform (PMC) and the economic growth. In the identification method, we choose the difference-in-differences method by the software of STATA. We find that the PMC reform on has a negative effect on economic growth in the short-term, and has a positive effect on economic growth in the long-term. The main reason for the differences is to promote reform of infrastructure spending
more » ... h, in the short-term, the effect is lagged, but in the long term, it will benefit from that. Otherwise, reform makes the urban wage increase, than promote consumption, than the total amount of investment will increase. At last, will have a positive impact on economic growth. Overall, the reform has a positive effect on economic growth in the long term.
doi:10.4236/me.2017.811091 fatcat:2mmz7xq5ejh63nioc7fgslfaaa