Research On Dynamic Relationship Between Government Behavior And Regional Economy In Shenzhen

The government behavior is closely related to the regional economy in Shenzhen. Government revenue is a kind of government behavior and refers to the public revenue of government department. Economic growth determines government revenue while government revenue reacts to economic growth. This paper applies directed acyclic graph (DAG) to analyze the corresponding period causality between the government behavior and the regional economy in Shenzhen, and combines co-integration test, error correction model and Granger causality test to make an empirical study on the added value of Shenzhen's three industries and Shenzhen's government revenue from 1979 to 2016. The results show that: The government behavior is closely related to the regional economy in Shenzhen. The added value of Shenzhen's primary and tertiary industry, and Shenzhen's government revenue are the positive causes of the added value of Shenzhen's secondary industry over the same period. There is a one-way Granger causality between the added value of Shenzhen's secondary industry and Shenzhen's government revenue. There is also a one-way Granger causality between the added value of Shenzhen's tertiary industry and Shenzhen's government revenue. In addition, there is a co-integration relationship between the added value of Shenzhen's tertiary industry and Shenzhen's government revenue, and the long-term effect of the added value of Shenzhen's tertiary industry on Shenzhen's government revenue is greater than its short-term effect.