The Effects Of China’s Fiscal Investment On Economic Growth

Fiscal investment, also known as government investment or public investment, is an important part of social and economic activities, which plays an important role in economic development. There is still a lot of controversy on the topic of fiscal investment promoting economic growth, so further research is necessary. In this paper, based on China’s actual situation, briefly analyzes the impact of China’s fiscal investment on economic growth by means of theoretical and empirical research methods.First given the definition of fiscal investment in the second chapter, and the typical characteristics of the fiscal investment based on analysis from the direct and indirect fiscal investment mechanisms affecting economic growth, combined with the results of theoretical studies at home and abroad to build theoretical model between fiscal investment and economic growth indicators GDP,as a basis for empirical analysis. Chapter III from the point of view of empirical analysis, first combing since the founding of our country, especially fiscal policy after the introduction of reform and opening up policy relevant aspects of the fiscal investment, indicates that China’s measures to promote economic growth, flexibility in the use of fiscal investment policy and have achieved very good results, able to achieve today’s economic achievements have played a very important role in our country. At the same time, the use of fiscal investment and gross domestic product (GDP) in theory, based on data in the1978-2011, I use the ADF cointegration test methods and Granger causality test between relationship. Chapter Ⅳ, on the basis of the linear relationship between fiscal investment and gross domestic product (GDP), I use Eviews software to estimate the simple linear regression function between the two variables, indicating that the quantitative relationship between the size of the GDP and the fiscal investment, our reasonable control the scale of investment, improve investment efficiency reference. In this chapter the use of X-inefficiency evaluation method and the low efficiency of China’s fiscal investment process is analyzed from a qualitative point of view, the reasons of its low efficiency and may cause a brief analysis. Through theoretical and empirical analysis, we found that the close relationship between fiscal investment and economic growth in China, but in respect of the current fiscal investment situation, and it did not play its due role. There are many aspects needed to be optimized, such as the structure of fiscal investment is not very reasonable, requiring a combination of the actual development of China’s economy to adjust. Thus, China’s fiscal investment can also play a greater role. On the basis of this conclusion, combined with China’s actual situation, I proposed to optimize the structure of fiscal investment, improving the efficiency of fiscal investment policy recommendations.