Abstract: Whether it is the economic competition based on the struggle for economic resources or the top-down political yardstick competition, the financial intervention by local governments is likely to present its spatial correlation. This paper constructs reverse composite index depicting financial intervention and introduces the asymmetric weight matrix and the two-regime division into the generalized spatial econometric model, then it is found that there do exist imitative competitions towards financial interventions between provincial governments, but the error shock might lead to differentiated responses of the local governments. Meanwhile, those stragglers in the government performance competition will increase the sensitivity of the provincial governments towards the intervention from the competitors, while the inland provinces have higher degree of spatial correlation compared to the coastal provinces. This conclusion may have great significance in policy enlightenment for the central government to strengthen its role of financial coordination and supervision and give up the GDP-oriented performance evaluation as soon as possible.

Key words: inter-governmental competition; financial intervention; asymmetric weight matrix; two-regime generalized spatial econometric model