Empowering Cities : Good for Growth? Evidence from China
This paper utilizes a countrywide, county-to-city upgrade in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly-promoted cities have...
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| Format: | Publications & Research |
| Language: | English en_US |
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World Bank Group, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/02/23984231/empowering-cities-good-growth-evidence-china http://hdl.handle.net/10986/21448 |
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okr-10986-214482021-04-23T14:04:02Z Empowering Cities : Good for Growth? Evidence from China Zhu, T. Juni Mukim, Megha ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADMINISTRATIVE DECENTRALIZATION AGRICULTURAL ACTIVITIES AGRICULTURAL TAX BANK COMPETITION BANK LOANS BANKS BUDGET CONSTRAINTS BUSINESS ENVIRONMENT CENTRAL GOVERNMENT CITIES CITY GOVERNMENTS CITY LEADERS CITY OUTCOMES CITY POPULATION CITY POWER CITY UPGRADING COMMERCIAL BANKS CREDIT ALLOCATION CREDIT CONSTRAINTS DEBT DEBT FINANCING DECENTRALIZATION DISTRIBUTION OF ELECTRICITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EDUCATION LEVEL EMPLOYEE EMPLOYMENT EMPLOYMENT GROWTH EXPENDITURE FINANCING OBSTACLES GENDER GOVERNMENT EMPLOYEES GOVERNMENT POLICY HUMAN CAPITAL HUMAN RESOURCE MANAGEMENT INCOME INDUSTRIAL ENTERPRISES INDUSTRIAL OUTPUT INDUSTRIALIZATION INTERNATIONAL BANK JOB CREATION LOCAL GOVERNMENT LOCAL GOVERNMENT OFFICIALS LOCAL GOVERNMENT SIZE LOCAL GOVERNMENTS MAYOR MINISTRY OF FINANCE MUNICIPALITY NEW ENTRANTS OPERATING COST OPERATING COSTS OPERATING REVENUE POLICE POLICY DOCUMENT POLICY MAKERS PREFECTURES PRODUCTIVITY PROVINCE PROVINCIAL ADMINISTRATION PUBLIC PUBLIC EMPLOYEES PUBLIC FINANCE PUBLIC FUNDING PUBLIC HOSPITAL PUBLIC SERVICE PUBLIC SERVICE PROVISION PUBLIC SERVICES SALES REVENUES STATE BANKS STRUCTURAL REFORMS SUBNATIONAL SUBNATIONAL GOVERNMENTS SUBNATIONAL REGIONS SURCHARGES TAX TAX COLLECTION TAX REVENUES URBAN CONSTRUCTION URBAN GOVERNANCE URBAN MANAGEMENT URBANIZATION WAGES This paper utilizes a countrywide, county-to-city upgrade in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly-promoted cities have an incentive to utilize their new administrative remit to maximize gross domestic product and employment growth, there should be improvements in economic outcomes. The analysis finds that aggregate firm-level outcomes do not necessarily improve after county-to-city graduation. However, it does find that state-owned enterprises perform better post-graduation, with increased access to credit through state-owned banks as a possible explanation for the improvement in performance. The most important finding is that newly-promoted cities with high capacity generally produce better aggregate firm outcomes compared with newly-promoted cities with low capacity. The conclusions are twofold. First, in terms of access to credit, the paper provides evidence that relaxing credit constraints for firms could lead to large increases in firm operation and employment. Second, increasing local government's administrative remit is not enough to lead to better firm and economic outcomes; local capacity is of paramount importance. 2015-02-13T19:07:41Z 2015-02-13T19:07:41Z 2015-02 http://documents.worldbank.org/curated/en/2015/02/23984231/empowering-cities-good-growth-evidence-china http://hdl.handle.net/10986/21448 English en_US Policy Research Working Paper;No. 7193 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific China |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADMINISTRATIVE DECENTRALIZATION AGRICULTURAL ACTIVITIES AGRICULTURAL TAX BANK COMPETITION BANK LOANS BANKS BUDGET CONSTRAINTS BUSINESS ENVIRONMENT CENTRAL GOVERNMENT CITIES CITY GOVERNMENTS CITY LEADERS CITY OUTCOMES CITY POPULATION CITY POWER CITY UPGRADING COMMERCIAL BANKS CREDIT ALLOCATION CREDIT CONSTRAINTS DEBT DEBT FINANCING DECENTRALIZATION DISTRIBUTION OF ELECTRICITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EDUCATION LEVEL EMPLOYEE EMPLOYMENT EMPLOYMENT GROWTH EXPENDITURE FINANCING OBSTACLES GENDER GOVERNMENT EMPLOYEES GOVERNMENT POLICY HUMAN CAPITAL HUMAN RESOURCE MANAGEMENT INCOME INDUSTRIAL ENTERPRISES INDUSTRIAL OUTPUT INDUSTRIALIZATION INTERNATIONAL BANK JOB CREATION LOCAL GOVERNMENT LOCAL GOVERNMENT OFFICIALS LOCAL GOVERNMENT SIZE LOCAL GOVERNMENTS MAYOR MINISTRY OF FINANCE MUNICIPALITY NEW ENTRANTS OPERATING COST OPERATING COSTS OPERATING REVENUE POLICE POLICY DOCUMENT POLICY MAKERS PREFECTURES PRODUCTIVITY PROVINCE PROVINCIAL ADMINISTRATION PUBLIC PUBLIC EMPLOYEES PUBLIC FINANCE PUBLIC FUNDING PUBLIC HOSPITAL PUBLIC SERVICE PUBLIC SERVICE PROVISION PUBLIC SERVICES SALES REVENUES STATE BANKS STRUCTURAL REFORMS SUBNATIONAL SUBNATIONAL GOVERNMENTS SUBNATIONAL REGIONS SURCHARGES TAX TAX COLLECTION TAX REVENUES URBAN CONSTRUCTION URBAN GOVERNANCE URBAN MANAGEMENT URBANIZATION WAGES |
| spellingShingle |
ACCESS TO CREDIT ACCESS TO FINANCE ACCOUNTING ADMINISTRATIVE DECENTRALIZATION AGRICULTURAL ACTIVITIES AGRICULTURAL TAX BANK COMPETITION BANK LOANS BANKS BUDGET CONSTRAINTS BUSINESS ENVIRONMENT CENTRAL GOVERNMENT CITIES CITY GOVERNMENTS CITY LEADERS CITY OUTCOMES CITY POPULATION CITY POWER CITY UPGRADING COMMERCIAL BANKS CREDIT ALLOCATION CREDIT CONSTRAINTS DEBT DEBT FINANCING DECENTRALIZATION DISTRIBUTION OF ELECTRICITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY EDUCATION LEVEL EMPLOYEE EMPLOYMENT EMPLOYMENT GROWTH EXPENDITURE FINANCING OBSTACLES GENDER GOVERNMENT EMPLOYEES GOVERNMENT POLICY HUMAN CAPITAL HUMAN RESOURCE MANAGEMENT INCOME INDUSTRIAL ENTERPRISES INDUSTRIAL OUTPUT INDUSTRIALIZATION INTERNATIONAL BANK JOB CREATION LOCAL GOVERNMENT LOCAL GOVERNMENT OFFICIALS LOCAL GOVERNMENT SIZE LOCAL GOVERNMENTS MAYOR MINISTRY OF FINANCE MUNICIPALITY NEW ENTRANTS OPERATING COST OPERATING COSTS OPERATING REVENUE POLICE POLICY DOCUMENT POLICY MAKERS PREFECTURES PRODUCTIVITY PROVINCE PROVINCIAL ADMINISTRATION PUBLIC PUBLIC EMPLOYEES PUBLIC FINANCE PUBLIC FUNDING PUBLIC HOSPITAL PUBLIC SERVICE PUBLIC SERVICE PROVISION PUBLIC SERVICES SALES REVENUES STATE BANKS STRUCTURAL REFORMS SUBNATIONAL SUBNATIONAL GOVERNMENTS SUBNATIONAL REGIONS SURCHARGES TAX TAX COLLECTION TAX REVENUES URBAN CONSTRUCTION URBAN GOVERNANCE URBAN MANAGEMENT URBANIZATION WAGES Zhu, T. Juni Mukim, Megha Empowering Cities : Good for Growth? Evidence from China |
| geographic_facet |
East Asia and Pacific China |
| relation |
Policy Research Working Paper;No. 7193 |
| description |
This paper utilizes a countrywide,
county-to-city upgrade in the 1990s to identify whether
extending the powers of urban local governments leads to
better firm outcomes. The paper hypothesizes that since
local leaders in newly-promoted cities have an incentive to
utilize their new administrative remit to maximize gross
domestic product and employment growth, there should be
improvements in economic outcomes. The analysis finds that
aggregate firm-level outcomes do not necessarily improve
after county-to-city graduation. However, it does find that
state-owned enterprises perform better post-graduation, with
increased access to credit through state-owned banks as a
possible explanation for the improvement in performance. The
most important finding is that newly-promoted cities with
high capacity generally produce better aggregate firm
outcomes compared with newly-promoted cities with low
capacity. The conclusions are twofold. First, in terms of
access to credit, the paper provides evidence that relaxing
credit constraints for firms could lead to large increases
in firm operation and employment. Second, increasing local
government's administrative remit is not enough to lead
to better firm and economic outcomes; local capacity is of
paramount importance. |
| format |
Publications & Research |
| author |
Zhu, T. Juni Mukim, Megha |
| author_facet |
Zhu, T. Juni Mukim, Megha |
| author_sort |
Zhu, T. Juni |
| title |
Empowering Cities : Good for Growth? Evidence from China |
| title_short |
Empowering Cities : Good for Growth? Evidence from China |
| title_full |
Empowering Cities : Good for Growth? Evidence from China |
| title_fullStr |
Empowering Cities : Good for Growth? Evidence from China |
| title_full_unstemmed |
Empowering Cities : Good for Growth? Evidence from China |
| title_sort |
empowering cities : good for growth? evidence from china |
| publisher |
World Bank Group, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/02/23984231/empowering-cities-good-growth-evidence-china http://hdl.handle.net/10986/21448 |
| _version_ |
1764448290670116864 |