Growth target management and regional economic growth

The share of the east in national economy has decreased for the first time during the past three decades. Based on the fact that the economic growth target set by government dominates this new trend, we put forward the hypothesis that governments employ the investment growth target to manage the economic growth target. We construct a novel provincial panel data, which matches actual economic data with target data from Report on the Work of the Local Governments (2001-2013), and find that effects of the investment growth target on the economic growth target are statistically and economically significant. We also find that only after the implementation of policies for promoting regional coordinated development, which is launched by the central government in the early of 2000s and ultimately transfers resources from the east to other regions, do these effects become significant.