Do governmental policy interventions help urban economic recovery? Experimental evidence from China's provinces governance amid the COVID-19 pandemic

Abstract

By examining China's province-level data, this paper uses governmental intervention theory to investigate the extent to which governmental policy interventions alleviate the impact of the COVID-19 pandemic on local economic growth. Results suggest that stronger government intervention during COVID-19 pandemic boost the economic recovery, and the effectiveness of governmental policy interventions is contingent on pandemic severity and local economic endowment. Specifically, facilitating effect of government intervention on economic growth is effective in all provinces, and the impact of government intervention is more pronounced in the province with more diagnosed cases, a high level of marketization and fiscal income.