Regional Analysis On Chinese Infrastructure Output Effect

In the reforming and opening30years, China’s infrastructure level went throughcontinuous improvement, and made a great impact on our economic growth. Since thefinancial crisis in2008, China conducted a large-scale infrastructure investment tostimulate economic growth. However, due to the "double" effects of infrastructureinvestment for economic growth, and different areas of economic and geographicconditions, so it’s meaningful to explore the output effects of infrastructureinvestment in different areas. it is also important to examine whether China’sprovincial and municipal infrastructure investments have achieved the optimalsize,which has important direction to our country’s infrastructure investments.In this paper, China’s31provinces with variable data from year1998to2009wasused to analyze the output effects of infrastructure investment with thefixed-coefficient model, then analyzed transport infrastructure and electricalinfrastructure’s output effects in the eastern, central and western areas, and finallybased on the previous analysis,checked whether different areas achieveed the optimalsize. Although there are lots of domestic and international literatures on studyinginfrastructure output effects on economic growth, few literatures did this fromtransport infrastructures and electrical infrastructures.Literatures studying optimalsize in the various areas are not common too.Therefore this paper has importantreference value to China’s construction and investment of infrastructures.This study found that the output effects of infrastructures were significant inmost provinces The output elasticity of infrastructure capital is greater in central andwestern provinces than that in eastern provinces, indicating that the infrastructurelevel is still low. eastern Fujian Province has a negative output elasticity,showingsome over-investment.So Fujian should be transfered to the social infrastructureinvestment.The output elasticity of transport infrastructure is the highest in thewestern region, followed by the eastern, then the lowest in the central; the outputelasticity of electricity infrastructure is the highest in the central, followed by thewestern, then the lowest in eastern.these conclusions provide a reference toinvestments in regional infrastructure. to promote western economy,China can investlots of transport infrastructures in the west, take some modest first principles forinfrastructure investment.In central region, electricity infrastructure investment canpromote their economic growth better.Fujian Province in eastern region, turns out tobe over-invested, while other provinces are not excessive investment, and central andwestern regions appears relative lack of investment in infrastructure. Therefore, inorder to promote the rational infrastructure investment, to play its biggest role inpromoting the economy, this paper presents the importance of infrastructure investment in the mid-west regions.China should focus on regional balance ininfrastructure investment, optimize the investment structure and give some moderatepriority to the development of regional infrastructure.