Author(s)

Ruoxi Chen

School of Economics, Jinan University, Guangzhou, China.

Fiscal absorbing capacity is an essential part of national capacity, whose shortcoming would drive local governments to raise capital through non-standardized channels. Thus causing a negative effect on national governance. The paper would define fiscal absorbing capacity in three aspects, including fiscal absorbing scale, fiscal absorbing autonomy and fiscal absorbing efficiency, and would make measurement and empirical analysis on the fiscal absorbing capacity in seven megacities from 2008 to 2014 by adopting fixed effect model combined with factor analysis, the result of which shows that reverse change trend exists in municipalities and prefecture-level cities of megacities with over ten million population, and that fiscal expenditure decentralization, economic factor and demographic factor all have significant effect on fiscal absorbing capacity. Therefore, powers of finance and duties reasonably divided among megacities should be put forward to promote the optimization and upgrading of industrial structure; and the financial guarantee of municipal governments in megacities should be strengthened through reforms of transfer payment system and household registration.

Fiscal Absorbing Capacity, Factor Analysis, Megacity

Chen, R. (2017) Measurement of Fiscal Absorbing Capacity in Megacities and Analysis on Their Influence Factors
—Empirical Research Based on Factor Analysis Combined with Panel Data. Open Journal of Business and Management, 5, 298-311. doi: 10.4236/ojbm.2017.52027.