Spatial Econometric Analysis of Debt Growth Convergence of China’s Local Governments
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Based on the data of urban investment bond panel data from 30 provinces in China from 2005 to 2014, this paper measured inter-provincial differences of China’s local government debt growth through the uses of Gini coefficient, logarithmic dispersion mean and Theil index, constructed the spatial convergence model to analyze the convergence of China’s local government debt growth. Results show that the scale of China’s local government debt is on rising as a whole while showing an outstanding feature of inter-provincial differences. Particularly, local government debt mean of eastern coastal provinces are higher, but growth rates are lower. In contrast, local government debt mean of midwestern inland provinces are lower, but growth rates are at a higher level. According to Moran scatter plot and LISA cluster chart, China’s local government debt, in terms of geographical space, has the significant features of autocorrelation and cluster trend. When taking spatial effects into accounts, one can find out that China’s local government debt growth has both absolute convergence and conditional convergence. Meanwhile, the convergence speed of China’s local government debt growth presents that the midwestern inland region is faster than that of in the eastern coastal region.
Local government debt growth; Convergence; Spatial econometric model