Setting local economic growth targets: does it mitigate nationwide policy uncertainty?
研究地方经济增长目标能否抵消全国性政策不确定性对企业绩效的负面影响，发现更高的地方增长目标能促进企业投资，但可能引发投资错配和效率损失。
Institutional theory holds that local governance is essential in shaping regional economic activity. This study evaluates whether local economic growth targets offset the detrimental effect of nationwide policy uncertainty on local business performance. Regression analyses of data from industrial firms and manually collected data on city economic growth targets in China show that higher local growth targets result in greater corporate investment, conditional on nationwide policy uncertainty, and that the impact is substantial through financial subsidies and allocating credit resources. However, local discretion in economic growth target setting might cause investment misallocation and efficiency loss.