Author(s)

Junjun Chen

College of Economics, Jinan University, Guangzhou, China.

This paper studies the relationship between government size and local economic growth in China. This paper uses the annual panel data of 29 provinces, municipalities and autonomous regions from 2007 to 2017 to use a fixed effect model for regression estimation. It is concluded that there is a significant positive correlation between the scale of local government and local economic growth. In the regional heterogeneity regression estimation, we found that the relationship between government size and economic growth is not significant in the eastern regions, while the relationship is significant in the central and western regions, which is a positive correlation. After using the robustness test of the replacement explanatory variables, the conclusions remain consistent.

Government Size, Economic Growth, Fixed Effect Model

Chen, J. (2020) Research on the Relationship between Government Size and Economic Growth. Modern Economy, 11, 209-219. doi: 10.4236/me.2020.112018.