Research On The Problem That The Government Investment Crowd Out The Private Investment In China

For over30years of reform and opening-up, the investment is always playing an important role in the development of national economy. In our country, the investment is the part of "troika" which has the strongest power. Furthermore, private investment has gradually become the most dynamic part of the whole society investment, and its proportion in the total investment has a rising trend. But market-forces are difficult to resist the fluctuations caused by the economic externality and market failure alone. Especially in the post-crisis era, in order to maintain the healthy development of the economy, we need the government to take more positive means of macroeconomic regulation and control, so as to make positive promoting effect on private investment and even the society as a whole.In the end, we can hit the mark of improving the investment scale and efficiency of the whole society and optimizing the investment structure.The world economics have paid close attention to the government’s fiscal policy and its role in the economic macro-control. Especially in the period of economic transition of China’s economy, the government’s fiscal policy is particularly important because of all kinds of pressure and challenge at home and abroad. Therefore, the "crowding out" and "crowding in" effect from government investment to private investment has become the research focus in the economics.In this paper, I divided annual panel data into eastern, central and western areas and used the panel data model to study the impact from our country’s government investment to the private investment, based on the research before and the present situation of government investment and private investment in China.The content of this article as follows:(1)The study of relevant theory In order to make a success in this research and analysis, the author stated related theories on the extrusion effect of government investment in this paper. Specifically, the first is the definition of basic concepts, such as government investment, private investment, crowding out and crowding in effect; The second is the discussion of the mechanism of the effect, including the general mechanism of government investment in extrusion effect and the mechanism of our government investment; Finally, based on different starting point and the assumptions, the author deduced the model of impact of government investment to the private investment.(2)The analysis of the status quoThis part of the research content is the basis for subsequent empirical research.(3)An empirical analysis of the impact on private investment from our government investmentThis part is the core part of this paper. First of all, based on panel data model, the author used the unit root test to diagnose data, through setting the corresponding variables; Second, the author determined the shape of regression model by carrying on the Hausman test and F test in Eviews software; At last, the author made the research of government investment’s impact on private investment, through the three dimensions of time, regional and industry.(4)Policy recommendationsBased on the present situation of our government investment and private investment, the author made the policy recommendations of coordinating the Government investment and private investment in our country.The main conclusions of this paper are:based on the previous analysis of the status quo of Chinese government investments and private investments, the author drew the conclusion that the government investments of china had different effects on private investments, depending on different areas, different times and different industries.