The study looked at why capital flows between regions in China are not working well, focusing on the impact of government size. They found that having a big government, especially spending on physical infrastructure, hinders capital inflows. On the other hand, factors like capital return, institutional quality, and human capital help attract capital. Surprisingly, spending on education doesn't have the same negative effect as spending on infrastructure. The study suggests that letting the market decide where resources, especially capital, should go is important for improving capital flows in China.