System quality, promotion incentive mechanism and local government behaviour: a micro-interpretation on market segmentation in China

摘要

Focusing on market segmentation during the economic transition in China, this paper analyzes the relationship between the so-called "championship competition" system and local government expenditure on "productive public goods". We try to involve these two factors in explaining the local government behaviour. The paper concludes that, with promotion incentive mechanism centred, whether and how far the "championship competition" system would influence the economic growth depends on the economic structure in the region.