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The Role of Cities in Sustainability Transitions: New Perspectives for Science and Policy Read chapter Read first chapter

2016 | OriginalPaper | Chapter

Impact of Local Government Monetary and Fiscal Policies on Output Growth of Firms

Authors : Changkeun Lee, Euijune Kim

Published in: Quantitative Regional Economic and Environmental Analysis for Sustainability in Korea

Publisher: Springer Singapore

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Abstract

This study explores the impacts of the monetary and fiscal policies of local governments on the output growth of firms, using multilevel statistical models. It concludes that short-term loans and bonds have a positive influence on output growth but long-term loans have a negative effect, while the effect of paid-in-capital increases is inconclusive and insignificant. A credit guarantee from the local government has the largest impact on the elasticity values of factor inputs and financing amounts with respect to output, compared to other government expenditure programs.

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previous chapter Spatial Agglomeration and Firm Performance in Korean Manufacturing Industry, 2012
next chapter Assessment of Community Vulnerability to Natural Disasters in Korea by Using GIS and Machine Learning Techniques
Footnotes
1
In 1997, the Korean government established the Corporate Restructuring Committee and instituted corporate restructuring emergency funding. In 2008, the Coordinating Committee of Creditor Financial Institutions was launched to advance the restructuring process.
 
2
The bank-based system emphasizes the role of banks in mobilizing capital and managing risk, while the market-based system emphasizes the role of markets in enhancing risk management, information dissemination, corporate control, and capital allocation (Lee 2012; Levine and Zervos 1998).
 
3
The SMA includes Korea’s capital city, Seoul, and its adjacent provinces, Incheon and Gyeonggi.
 
4
In Korea, the definition of small- and medium-sized firms is specified in the Minor Enterprises Act.
 
5
In multilevel analysis, the hierarchical structure of data is explicitly considered (Goldstein 2003). Therefore, we could analyze the effects of regional monetary and fiscal policies among regions on the Level 2, using this model.
 
6
Niskanen (1971) explained that public administrators might be motivated to maximize revenue, and thus expenditures, in order to expand the desirable aspects of their working environment.
 
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Metadata
Title
Impact of Local Government Monetary and Fiscal Policies on Output Growth of Firms
Authors
Changkeun Lee
Euijune Kim
Copyright Year
2016
Publisher
Springer Singapore
Book
Quantitative Regional Economic and Environmental Analysis for Sustainability in Korea

Print ISBN: 978-981-10-0298-4

Electronic ISBN: 978-981-10-0300-4

Copyright Year: 2016

DOI
https://doi.org/10.1007/978-981-10-0300-4_6