Sustainability

Research

17 pages, 341 KiB

Open AccessArticle

Good Governance within Public Participation and National Audit for Reducing Corruption

by Huishui Su, Yu Lu, Oleksii Lyulyov and Tetyana Pimonenko

Sustainability 2023, 15(9), 7030; https://doi.org/10.3390/su15097030 - 22 Apr 2023

Cited by 13 | Viewed by 1977

The globalization process and acceptance of a new paradigm for world development aimed at attaining sustainable development require extending the concept of good governance, which allows the improvement of institutional quality. At the same time, governance performance depends on corruption and public participation [...] Read more.

The globalization process and acceptance of a new paradigm for world development aimed at attaining sustainable development require extending the concept of good governance, which allows the improvement of institutional quality. At the same time, governance performance depends on corruption and public participation in national audits. The paper aimed to analyze the impact of public participation in national audits on corruption governance. The object of investigation was 30 Chinese provinces for 2008–2017. The study applied a regression model with the preventive, exposed, and defensive functions of audits. The findings showed that the “governance view” of the audit is the root cause of the audit. In addition, the “immune system” function of national audits has an inhibitory effect on corruption, among which the deterrent effect of the defense function is the most-influential. The influence of public participation in national audits on corruption governance is mainly reflected in the deterrence and resistance function of national audits. The paper contributes to audit theory by incorporating the public participation mechanism, improving the governance path of “national audit—public participation—corruption governance”. It allows improving the national audit “immune system” function by considering the democratic connotation of decision-making and developing a good governance environment. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

17 pages, 297 KiB

Open AccessArticle

Local Government Debt and Corporate Maturity Mismatch between Investment and Financing: Evidence from China

by Haiyun Ma and Deshuai Hou

Sustainability 2023, 15(7), 6166; https://doi.org/10.3390/su15076166 - 3 Apr 2023

Cited by 1 | Viewed by 2017

Abstract

Based on the perspective of investment and financing term structure, this study verifies that local government debt crowds out bank loans available to corporates, resulting in corporate maturity mismatch between investment and financing, namely, short-term financing for long-term investment. According to our heterogeneity [...] Read more.

Based on the perspective of investment and financing term structure, this study verifies that local government debt crowds out bank loans available to corporates, resulting in corporate maturity mismatch between investment and financing, namely, short-term financing for long-term investment. According to our heterogeneity analyses, the real impact of local government debt on maturity mismatch between investment and financing is more pronounced for non-state-owned enterprises and firms with high financing demand, located in cities with more local government debt and low financial development. Furthermore, our study reveals that local government debt and corporate maturity mismatch between investment and financing bring about underinvestment and default risk, which ultimately affects local sustainable economic development. This research contributes to the literature on Chinese-specific maturity mismatches. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

15 pages, 799 KiB

Open AccessArticle

Tax Payment and the Performance of SMEs: A Longitudinal Analysis on EU Countries

by Teodora Roman, Nicu Marcu, Valentina Diana Rusu, Erika Maria Doacă and Adelina Andreea Siriteanu

Sustainability 2023, 15(2), 927; https://doi.org/10.3390/su15020927 - 4 Jan 2023

Cited by 5 | Viewed by 3510

Abstract

Small and medium enterprises (SMEs) are considered the engine of any economy and actively contribute to the economic growth of countries. For this reason, there are concerns regarding the identification of the factors that influence the activity of SMEs and, in particular, how [...] Read more.

Small and medium enterprises (SMEs) are considered the engine of any economy and actively contribute to the economic growth of countries. For this reason, there are concerns regarding the identification of the factors that influence the activity of SMEs and, in particular, how they manage to adapt and obtain better performance in a constantly changing economic environment. The tax burden is high and discouraging for many enterprises, so we aimed to analyse the relationship between the taxes imposed on SMEs and their performance. Thus, the main purpose of our study was to analyse the relationship between the taxes paid by SMEs and their performance. The period of analysis consisted of the 14 years between 2008 and 2021. The analysed sample comprised the 27 member countries of the European Union. To test the relationship, we used panel data methods, and we considered two indicators that measure the performance of SMEs as dependent variables and indicators that measure the taxes paid by businesses as independent variables. For a more in-depth analysis, we used clusters of countries. The main results show that the taxes that SMEs have to pay are seen as obstacles in the way of improving performance. Moreover, the relationship between taxes and the performance of SMEs depends on the specifics of the economy of the country. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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17 pages, 869 KiB

Open AccessArticle

Fiscal Decentralization, Regional Innovation and Industrial Structure Distortions in China

by Yuchen Song, Jingshu Ma, Shuai Guan and Yongfu Liu

Sustainability 2023, 15(1), 710; https://doi.org/10.3390/su15010710 - 30 Dec 2022

Cited by 6 | Viewed by 1923

Abstract

The current industrial structure in China must be adjusted to create a new development pattern and promote high-quality economic development. Based on theoretical analysis and provincial panel data from 2008 to 2018, we empirically analyzed the impact of fiscal decentralization and regional innovation [...] Read more.

The current industrial structure in China must be adjusted to create a new development pattern and promote high-quality economic development. Based on theoretical analysis and provincial panel data from 2008 to 2018, we empirically analyzed the impact of fiscal decentralization and regional innovation on industrial structure distortion. The results showed that fiscal decentralization has hindered the evolution of the industrial structure in the desired direction but has promoted regional innovation and thus effectively alleviated the distortion of the industrial structure. Regional investigation showed regional differences between the effect of fiscal decentralization on industrial structure distortion and the mediating effect of regional innovation. In the eastern and central regions, fiscal decentralization was not conducive to improving the degree of industrial structure distortion. Still, it could reduce the degree of industrial structure distortion by enhancing the indirect effect of regional innovation, whereas this indirect effect was not significant in the western region. We provide some policy suggestions to promote the coordinated development of the industrial structure. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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17 pages, 318 KiB

Open AccessArticle

A Study on the Fiscal Sustainability of China’s Provinces

by Qiongzhi Liu, Bang Cui and Chan Luo

Sustainability 2022, 14(23), 15678; https://doi.org/10.3390/su142315678 - 25 Nov 2022

Cited by 2 | Viewed by 1165

Abstract

Fiscal imbalances in China are widening; the problem of fiscal sustainability in each province is becoming increasingly serious. However, so far, few studies have focused on the issue of the fiscal sustainability of China’s provinces. This paper will focus on it to clarify [...] Read more.

Fiscal imbalances in China are widening; the problem of fiscal sustainability in each province is becoming increasingly serious. However, so far, few studies have focused on the issue of the fiscal sustainability of China’s provinces. This paper will focus on it to clarify the degree of fiscal sustainability in China’s provinces. In this paper, the GH test method is used to analyze the structural breaking of fiscal revenue and expenditure data of each province, the panel cointegration method is used to analyze the relationship between fiscal revenue and expenditure and DOLS is used to estimate the degree of fiscal sustainability of each province. It is found that the fiscal sustainability of most provinces in China, such as Beijing, Shanghai and Guangdong, is strong, while that of some provinces, such as Gansu, Qinghai and Xinjiang, is weak. This paper states that people should pay more attention to the fiscal sustainability of China’s provinces, and provinces with weak fiscal sustainability should minimize unproductive expenditures while the central government should continue to give appropriate financial support to local governments. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

13 pages, 258 KiB

Open AccessArticle

Family-Size Effect on Intergenerational Income Mobility under China’s Family Planning Policy: Testing the Quantity–Quality Trade-Off

by Xinxin Mu and Shenghu Chen

Sustainability 2022, 14(19), 12559; https://doi.org/10.3390/su141912559 - 2 Oct 2022

Cited by 1 | Viewed by 1494

Abstract

The causal link between family size and human capital investment in children is critical for family planning policy. However, empirical studies aiming to test the quantity–quality trade-off are far from sufficient. This paper tried to estimate the family-size effect on intergenerational income mobility [...] Read more.

The causal link between family size and human capital investment in children is critical for family planning policy. However, empirical studies aiming to test the quantity–quality trade-off are far from sufficient. This paper tried to estimate the family-size effect on intergenerational income mobility using China Family Panel Survey (CFPS) data. The empirical model of intergenerational income mobility with respective to family size was formulated, and the fertility rates allowed by family planning policy were used as an instrument variable for family size. It was found that intergenerational income elasticity tended to decrease with an increase in family size. The impact of family size on intergenerational income elasticity was sensitive to the income rank positions, and nonlinearity in intergenerational transmission of income under unequal family was observed. A quantity–quality trade-off analysis was applied to further test the family-size effect. Pronounced family-size effects were observed in low-income regions with tight budget constraints and in regions with less-developed credit markets, followed by an obvious quantity–quality trade-off. The sex difference in intergenerational transmission of income may be attributed to the existence of the “preference to sons over daughters” phenomenon. The present work provides a theoretical basis for shaping family planning policies toward sustainability. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

13 pages, 378 KiB

Open AccessArticle

Fiscal Pressure, Policy Choices and Regional Economic Disparity: Evidence from a Natural Experiment in China

by Mengting Ruan and Xiaolu Zhao

Sustainability 2022, 14(19), 12402; https://doi.org/10.3390/su141912402 - 29 Sep 2022

Cited by 4 | Viewed by 1298

Abstract

How significantly and through what mechanisms can regional economic disparity be shaped by fiscal incentives? This paper uses the exemption of the agricultural tax in 2005 across China as a natural experiment to answer this question. Using a “difference-in-differences” model, which allows us [...] Read more.

How significantly and through what mechanisms can regional economic disparity be shaped by fiscal incentives? This paper uses the exemption of the agricultural tax in 2005 across China as a natural experiment to answer this question. Using a “difference-in-differences” model, which allows us to make within-group comparisons before and after the reform, we show that the revenue loss of county governments aggravated inter-regional economic disparity. Reasons behind it lie in the different tactics that local governments employed when dealing with the financial stress. In particular, governments in lower-income regions chose a negative way including tougher tax enforcement and less production-oriented investments, while those in higher-income localities embraced positive taxation and expenditure strategies to attract more capital inflow. This paper helps shed light on how to optimize fiscal system arrangement to alleviate the broadening regional economic disparity and improve local fiscal sustainability. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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9 pages, 583 KiB

Open AccessCommunication

The State-Level Nonlinear Effects of Government Spending Shocks in the US: The Role of Partisan Conflict

by Xin Sheng and Rangan Gupta

Sustainability 2022, 14(18), 11299; https://doi.org/10.3390/su141811299 - 8 Sep 2022

Viewed by 1061

Abstract

Utilising a nonlinear (regime-switching) mixed-frequency panel vector autoregression model, we study the effects of government spending shocks in the United States (US) over the business cycle, while considering the role of partisan conflict. In particular, we investigate whether partisan conflict is relevant to [...] Read more.

Utilising a nonlinear (regime-switching) mixed-frequency panel vector autoregression model, we study the effects of government spending shocks in the United States (US) over the business cycle, while considering the role of partisan conflict. In particular, we investigate whether partisan conflict is relevant to the differences in fiscal spending multipliers in expansionary and recessionary business cycle phases upon the impact of annual government spending shocks, using quarterly state-level data covering 1950:Q1 to 2016:Q4. We find new evidence that fiscal multipliers can vary with economic and political conditions. The cumulated effects of government spending shocks are strong and persistent in recessions when the level of partisan conflict is low. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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17 pages, 271 KiB

Open AccessArticle

Do R&D Tax Credits Incentivize Radical or Incremental Innovation? Evidence from China

by Chunhuan Xiao and Ziyin Zhuang

Sustainability 2022, 14(14), 8238; https://doi.org/10.3390/su14148238 - 6 Jul 2022

Cited by 2 | Viewed by 1678

Abstract

Many countries use R&D tax credits to promote firm innovation. Using the data of A-share listed companies from 2012 to 2019, we use a fixed effects model to examine the heterogeneity effect of the R&D tax credit in China on radical and incremental [...] Read more.

Many countries use R&D tax credits to promote firm innovation. Using the data of A-share listed companies from 2012 to 2019, we use a fixed effects model to examine the heterogeneity effect of the R&D tax credit in China on radical and incremental innovation based on the perspective of firm property rights, scale, and age under the framework of heterogeneity. The results show that the R&D tax credit significantly stimulates radical and incremental innovation, but the incentive effect on radical innovation is weak. Further heterogeneity analysis shows that the incentive effects of enterprises with different complementary resources and innovation capabilities are different. Specifically, we find that the R&D tax credit has a stronger impact on incremental innovation of state-owned enterprises and radical innovation of non-state-owned enterprises. Compared with small firms and start-ups, it has a stronger incentive effect on the radical and incremental innovation of large-, medium-sized, and incumbent firms. Finally, the results are consistent and robust using the Heckman two-step method, core indicator substitution method, and change lag period. This paper deepens the theoretical research on the heterogeneity effect of tax incentives on firm innovation, while also providing insights on how to design R&D tax credits to raise radical innovation for emerging economies. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

19 pages, 646 KiB

Open AccessArticle

Economic Policy Uncertainty, Social Financing Scale and Local Fiscal Sustainability: Evidence from Local Governments in China

by Yuanting Xia, Wenxiu Hu and Zhenxing Su

Sustainability 2022, 14(12), 7343; https://doi.org/10.3390/su14127343 - 15 Jun 2022

Cited by 1 | Viewed by 1902

Abstract

The motivation for this paper is to investigate a previously unexplored exogenous shock to fiscal sustainability from economic policy uncertainty. To control for the impact of local government institutional and cultural factors on fiscal sustainability, we select data from 30 Chinese provinces for [...] Read more.

The motivation for this paper is to investigate a previously unexplored exogenous shock to fiscal sustainability from economic policy uncertainty. To control for the impact of local government institutional and cultural factors on fiscal sustainability, we select data from 30 Chinese provinces for the 2012–2020 period for empirical analysis. We find that economic policy uncertainty shocks have a robust negative effect on fiscal sustainability after controlling for endogeneity. Economic policy uncertainty has an impact on fiscal sustainability mainly through the mediating variable of the social financing scale. To cope with the impact of uncertain economic policies, corporations reduce the scale of investment and financing, and residents have defensive savings motivations, reducing consumption and increasing savings. Therefore, economic policy uncertainty can lead to a reduction in the social financing scale. A reduction in the social financing scale can reduce government revenue and increase the debt scale. Ultimately, this leads to a decrease in the fiscal sustainability of local governments. This paper can provide a theoretical reference for reducing the negative impact of government policy adjustments and improving fiscal sustainability. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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15 pages, 2156 KiB

Open AccessArticle

Fiscal Decentralization, Good Governance and Regional Development—Empirical Evidence in the European Context

by Mihaela Onofrei, Florin Oprea, Corneliu Iaţu, Lenuţa Cojocariu and Sorin Gabriel Anton

Sustainability 2022, 14(12), 7093; https://doi.org/10.3390/su14127093 - 9 Jun 2022

Cited by 5 | Viewed by 2024

Abstract

The nexus between local governments’ budgets and regional growth is a complex one, with organic interconnections, ideally offering better outcomes, both in the matter of (local) fiscal consolidation and the welfare of societies. In this study, we analyze the impact of local fiscal [...] Read more.

The nexus between local governments’ budgets and regional growth is a complex one, with organic interconnections, ideally offering better outcomes, both in the matter of (local) fiscal consolidation and the welfare of societies. In this study, we analyze the impact of local fiscal consolidation efforts (as reflected by the budget indicators regarding local revenues and expenditures for the countries involved) on regional development, using a sample of 21 EU Member States and a timescale between 2001 and 2019, based on specific data reported by Eurostat and the World Bank. By employing the Generalized Linear Model (GLM), the results show that some of the considered indicators have a statistically significant positive influence on the GDP per capita at the regional level, thus highlighting the important role of sound local public finances in achieving the objectives of regional development. Based on our findings, we recommended some improvements regarding the practice of local fiscal policy in order to enhance the role of fiscal consolidation in sustaining regional development within the subject countries. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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14 pages, 880 KiB

Open AccessArticle

The Sustainability of Mexican Municipal Public Debt

by Ernesto del Castillo, René Cabral and Eduardo Saucedo

Sustainability 2022, 14(11), 6558; https://doi.org/10.3390/su14116558 - 27 May 2022

Cited by 4 | Viewed by 1562

Abstract

This paper examines the sustainability of subnational governments in Mexico, focusing on its top 110 most indebted municipalities. We employ dynamic panel data techniques to assess whether municipal debt remained sustainable during 2007–2017. Our study finds that the subnational fiscal position of Mexican [...] Read more.

This paper examines the sustainability of subnational governments in Mexico, focusing on its top 110 most indebted municipalities. We employ dynamic panel data techniques to assess whether municipal debt remained sustainable during 2007–2017. Our study finds that the subnational fiscal position of Mexican municipalities remains sustainable despite the rapid growth of public debt following the 2008 global financial crisis. However, using Monte Carlo simulations, we show that random disturbances can significantly impact municipal governments’ debt, deteriorating governments’ finances after the shocks materialize. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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21 pages, 583 KiB

Open AccessArticle

Public Sector Downsizing and Public Sector Performance: Findings from a Content Analysis

by Shahram Ali Kazho and Tarik Atan

Sustainability 2022, 14(5), 2989; https://doi.org/10.3390/su14052989 - 3 Mar 2022

Cited by 2 | Viewed by 3263

Abstract

The current literature suggests that downsizing is a popular strategy among public sector managers to improve organizational efficiency, effectiveness, and performance. To extend this line of research, this study aims to empirically examine the effects of public sector downsizing on organizational performance in [...] Read more.

The current literature suggests that downsizing is a popular strategy among public sector managers to improve organizational efficiency, effectiveness, and performance. To extend this line of research, this study aims to empirically examine the effects of public sector downsizing on organizational performance in the context of the Kurdistan Region of Iraq. To determine the effects of the subdimensions of public sector downsizing on the subdimensions of public sector performance, a conceptual model is developed and examined based on qualitative data collected from a sample of 20 public sector managers in various organizations in the Kurdistan Region of Iraq. Content analysis of the interviews reveals that, as a subdimension of public sector downsizing, privatization is suggested to link to the subdimensions of public sector performance. Implications of the findings for theory and practice are discussed, and avenues for future research are recommended. Full article

(This article belongs to the Special Issue Towards Sustainable Public Finances: Public Policy and Good Governance)

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