Education expenditure is often regarded as an instrument for long-term development, yet the empirical link between district-level fiscal education allocations and contemporaneous local economic activity remains ambiguous. While public education spending can boost future productivity via human-capital accumulation, its benefits are time‑lagged and geographically spill over across administrative boundaries. The education expenditure share reflects budget composition rather than the absolute magnitude or effectiveness of educational investment. Using a balanced panel dataset of Beijing’s 16 districts from 2016 to 2023, this study adopts two-way fixed-effects regressions. Across different specifications, no statistically significant contemporaneous association is found between the education budget share and nominal gross domestic product (GDP) per resident; coefficient signs shift conditional on fiscal control variables. This does not imply education spending is economically valueless. It suggests contemporaneous district GDP is an inadequate metric for evaluating education budget allocation. Fiscal assessment should consider spending scale, demographic demands and long‑run outcomes, and it underscores the importance of small‑cluster inference and clear fiscal definitions in sub-municipal panel research.
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Jin, L. (2026) Education Budget Shares and District Economic Activity in Beijing: Evidence from 2016-2023. Hong Kong Financial Bulletin, 2(3), 23-33. https://doi.org/10.71052/hkfb2025/CWXB9590