Local Government Competition,Infrastructure Investment And Regional Economic Growth

During the process for China to transform from economic giant to economic power,the problem on government regulations and economic growth modes have cause wide attention and discussion in related areas,mainly demonstrated in the following two aspects: effects of local government competition under financial decentralization and government-dominated infrastructure investment pattern on China’s regional economy and whether it is the effective method for the current expanded investment scale of infrastructure and adjusting investment structure of infrastructure to improve the balanced improvement of regional economy and promote quality of economy growth.In theory,from current literature,local government competition and infrastructure investment is mainly taken as an individual element to measure its economic growth effect.It remains further researches on interaction functions between two factors.Meanwhile,most theories lay much more emphasis on regional homogeneity hypothesis,but neglect the significance of regional heterogeneity among different regions.What is more,under the condition of open economy,it is rare for research literature on regional economic growth within infrastructure investment overflow from the angle of infrastructure space overflow.In current stage,researches on local government competition are mainly on evaluation of economic performance,but rare in its growth mechanism.This paper will analyze strategies of China’s local government on infrastructure investment from both national and regional levels from the view of infrastructure investment angle and then study how local government affects regional economic growth through infrastructure investment.This paper will take local government competition behaviors as the research object and infrastructure investment as the research perspective and carry out theoretical and empirical analysis on affecting channels of local government competition on regional economic growth.Under the background of financial decentralization,the influence mechanism of infrastructure investment competition of local government on economic growth includes the following three aspects: direct effect,spatial spillover effect and transmission effect.This paper follow the research idea of theoretical analysis,empirical test and policy suggestions and discuss effects of infrastructure investment competition of local government such as growth effect,spatial spillover effect,transmission and external effects on regional economic growth.Firstly,to obtain a relatively comprehensive understanding on infrastructure investment behaviors of China’s local government,this paper carry out analysis on strategy behaviors of local governments in total infrastructure investment and classification analysis and make comparison in regional level.Then it will study the relationship between infrastructure and regional economic growth.Implement empirical test on direct effects and spatial spillover effect of total investment and classification investment of China’s infrastructure on regional economic growth on the basis of spatial economic model.Meanwhile,it also carries out research on transmission effect of local government on regional economic growth and total factor productivity.Inspect transmission effect of local government on quantity and quality of regional economy from two angles of infrastructure investment scale and investment structure changes: firstly implement empirical test on transmission effect of local government competition on GDP per capita based on infrastructure investment;Secondly,carries out transmission effect of local government on total factor productivity based on infrastructure investment.In the end,conclude the main researches in this paper and make responding countermeasures and suggestions on how to regulate investment behavior of local government.As researches in this paper founded,(1)It exists obvious strategy interaction for local government in infrastructure investment behavior and demonstrates distinct differences in classifications and areas.In the national level,total infrastructure investment is dominated by yardstick competition and financial competition.From the regional level,it is demonstrated as strategic complement in eastern area and strategic alternative in western area respectively.The results of classification investigation indicates that investment imitation behaviors will become more obvious if economic development are closer.In factor competition,it exists distinct strategic alternative for economic infrastructure investment and external mechanism plays a main role.The local infrastructure investment is mainly demonstrated as obvious strategic complement and financial competition mechanism plays the dominant role.(2)The growth effect and spatial spillover effect of infrastructure investment are demonstrated as classification and regional different.The local infrastructure investment varies little on growth effect and spatial spillover effect in eastern area,while it is obvious in middle growth effect and positive spatial spillover effect in middle area.However,both growth effect and spatial spillover effect are obvious in western areas.The economic infrastructure investment is demonstrated as obvious positive spatial spillover effect in both eastern and western areas.(3)From the national level,local government has driven the improvement of total factor productivity,indicating that China’s local government competition benefits to quality of regional economic growth.From the regional perspective,local government competition also greatly promote total factor productivity;(4)From the national level,infrastructure investment structure benefits to economic growth,but is negative to quality improvement of economic growth.From the regional angle,infrastructure investment structure promotes economic growth in eastern and western areas and drive the quality optimization of economic growth in eastern area.(5)From the national level,it exists obvious threshold effect for growth effect of local government competition based on infrastructure investment.From the view of region,for economic growth and total factor productivity,it exists obvious negative threshold effect on infrastructure investment structure for local government competition.The creativity of this paper is demonstrated as the following points.Firstly,build a theoretic model of economic growth on interaction effects between local government competition and infrastructure investment and reveals interactive mechanism between local government competition,infrastructure investment and regional economic growth;Secondly,construct a indicator to reflect dynamic changes of infrastructure investment structure;Thirdly,from national and regional levels,carry out empirical test on interactive functions of local government competition and infrastructure investment on regional economic growth;Fourthly,implement empirical test on interaction function of local government competition and infrastructure investment structure on total factor productivity.