A Research On Crowding Out Effects Of Government Investment On Private Investment In China's Western And Eastern Regions

Nowdays public fiscal policy becomes an inreasingly important way for government to carry out macroecnomics regulation and control around the world. Due to the limitations of the fiscal policy, many corresponding disadvantages will be caused and one of them is the crowding out effect of government investment on private investment. The phenomenon also exists in our country due to the positive fiscal policy and the research about it becomes a hotspot and has achieved more development. To study the effects the government makes on the private investment not only means a lot to the level and efficiency of our country's investment but also values much to the stablization and sound development of our economy. Due to the development level, differences in aspects such as resource conditions, regional location, our country are divided into several regional parts. A lot of research about the relationship of government investment and private investment has been made at home and abroad, but most of them are just focused on a certain country or a region and seldom referred to the period of China's transformation and the actual situation of our country. And most of the research content are finding out the crowding out effects via empirical analysis, lacking the research obout reasons which cause the results. So relative advise and suggestions for the western and eastern investments to co-existing better and sound development of economy have not been put up with.In this paper, the crowding effects and influence factors of the west and the east are studied with the main research contents and results are as follows: 1.the reasearch background, purpose and significance, the achievements and evaluations of the domestic and the foreign, and the research methods and innovations; 2.the theory summary of government investment, private investment and crowding out effect, including their respective connotation, theory and factor analysis of different regional crowding out effects; 3. the empirical analysis of the government investment on the private investment of the west and the east via VAR autoregressive time series and the comparison of the two regions. The results shows that the eastern government investment has a large crowding out effect on private investment while the western government has a slight crowding in effect on privat investment. 4. About the differences of the crowding out results in the west and the east, an empirical analysis ismade to explain the results. The industry structure, ownership structure, savings and ratio level are taken to the multiple regression analysis and the results show that the ownership leads to the crowding out effect in the east while the industry structure leads to the slight crowding in effect in the west. 5. Some advice and suggestions are put up to motivate the balanced development of the government investment and the private investment, making the economy develop soundedly. To be specific, the east should carry out ownership reform and motivate the society capital and the west ought to upgrade and improve the industry structure.The main contribution of this paper is making comparative analysis of extusion areas and making research on the influnce factors of crowding out effects, thus putting forward the targeted, specific policy recommendations to promote the interaction between government investment and private investment, leading to the sound and healthy development of our country's economy.