An Empirical Analysis Of The Contribution Of Financial Expenditure To The Economic Growth In Guangdong Province

In Guangdong province, which is a most influential province in China, it has very important meanings of keeping economy increasing fast continuously, while this is exactly one of the basic goals of government's macroeconomic policy. The fiscal expenditure policy, which is a main tool of government's macro adjustments and controls, play a more and more key role to the economic growth.Firstly, this paper introduces endogenous economic growth theory, which was born in the Knowledge-economy era, and its expenditure policy meaning. The core thought of this theory is that the long-term economic growth is explained by human capital, technical progress and other endogenous factor. All these variables are sensitive to government's expenditure policy. This has offered theoretical foundation for government accomplishing something in the modern economic society.Then this paper has reviewed historical change of economic growth and the fiscal expenditure of Guangdong briefly, then make an empirical analysis on the relations between the scale and the structure of fiscal expenditure and economic growth, and find that government's expenditure obvious promote the economic growth, but the function on the economic growth of expenditure is not the same in each part of the expenditure. The most astonishing conclusion is that the expenditure has greater role than the foreign capitals to the facilitation of the economic growth. This paper has carried on in-depth analysis to this conclusion based on the endogenous economic growth theory. At last, according to the result of theory and empirical analysis, this paper analyze the effect of fiscal expenditure of Guangdong Province, then points out the weak point among them , and put forward the corresponding policy recommendations.