Preferential Policies,Fiscal Decentralization Incentives and the Performance of Private Enterprises——A Comparative Analysis Based on the Experiences from Zhejiang and Shanxi Provinces

Abstract

This paper estimates the contributions of the strength of fiscal decentralization and the local preferential policies to the difference performances of private enterprises with the data from Zhejiang and Shanxi provinces.Our main discoveries are: the local governments which are differentiated by fiscal decentralization have contributions to the performance of the local private enterprises,but not so remarkable as expected.In the transition of local government's policies,tax and financing policies are more important.This conclusion indicates that an efficient executive system which can guarantee the contracts between government and enterprises is more practical than the preferential policy itself.