1. Setting local economic growth targets: does it mitigate nationwide policy uncertainty?
- Author
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Yang, Hao, Ma, Jing, and Pan, Yinghao
- Subjects
ECONOMIC development ,ECONOMIC activity ,REGIONAL economics ,RESOURCE allocation ,ORGANIZATIONAL performance - Abstract
Institutional theory holds that local governance is essential in shaping regional economic activity. This study evaluates whether local economic growth targets offset the detrimental effect of nationwide policy uncertainty on local business performance. Regression analyses of data from industrial firms and manually collected data on city economic growth targets in China show that higher local growth targets result in greater corporate investment, conditional on nationwide policy uncertainty, and that the impact is substantial through financial subsidies and allocating credit resources. However, local discretion in economic growth target setting might cause investment misallocation and efficiency loss. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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