Network Linkages and Spillover Mechanisms of Regional Economic Growth Tail Risks

Network Linkages and Spillover Mechanisms of Regional Economic Growth Tail Risks


Author:Wu Jian,Deng Chuang Journal:China Soft Science Date:2025(2)

Abstract:Cross-area transmission of tail risk is a major hidden danger that restricts the coordinated development of regional economy, therefore, it is urgent to clarify the spatial transmission paths and spillover channels of the tail risk of regional economic growth. In this paper, we measure the tail risk of China's provincial economic growth based on the GaR framework, and on the basis of which, we use social network analysis and the spatial Durbin model to investigate the network correlation characteristics and spillover mechanism of the tail risk of regional economic growth, respectively.This study finds that tail risk is event-driven and multi-distributed, and extreme event shocks can intensify tail risk in the short term, while the western region and the Yangtze River Economic Belt currently show strong risk immunity resilience. Regional tail risks have outstanding spillover depth and breadth, in which the risk linkage between the Yellow River Basin Economic Belt and other regions is more prominent. The recession of investment and consumption demand and the siphoning effect of factors triggered by local fiscal competition will exacerbate the spillover of the tail risk, while the benign expansion of bank credit will help to inhibit the proliferation of the tail risk. This paper provides useful policy insights for promoting the dynamic balance between stabilizing economic growth and risk prevention, and advancing the process of coordinated and sustainable regional development.

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