China’s Province Capital Flow Level Research Based On FH Model

As an important factor of production,capital flows across province in the drive of capital rate of return,improving the allocation efficiency of factors and driving regional economic development.In recent years,with the rapid development of our country’s economy,the advancement of the economic system reform,the market plays a more and more important role in the allocation of resources,capital liquidity across provincial research also has attracted much attention.In this paper,we wants to do a systematic research of the capital cross-regional flow condition in our country in recent years,by using the statistics data to test the actual level of capital flows across regions,analysis the main factors driving capital flows across regions,accurate grasp across provincial capital flow characteristics in our country,explained in the current economic system reform under the background of capital flows across provincial trend,provide a reference for the government and relevant departments to formulate relevant policies.In this paper,the feldstein-horioka model(FH model)is selected as the theoretical model for the measurement of capital flow.Using relevant economic data,respectively set up our country provincial capital flows of FH model and conditional Feldstein-Horioka model(conditional FH model)under certain conditions,to our country across provincial capital flow level for empirical analysis.By dividing the sample interval and establishing the model,the paper studies the trend of the flow level of capital across provinces in recent years.In addition,the conditional FH model was improved to extend the conditional feldstein-horioka model(conditional FH expansion model)to investigate the main influencing factors of capital flows between provinces.The empirical study found that the overall capital flow level of 31 provinces and cities in China was relatively good in 1997-2016,and the level of capital flow showed a trend of decreasing first and then rising.The FH model is consistent with the analysis results of conditional FH model.Control part,the factors affecting the establishment of provincial capital flows between conditional FH extension model,the results show that the main factors that have a positive impact on capital flows of labor costs,land costs,economic structure,government intervention,openness and infrastructure construction;The factors that have negative impact on capital flows include transportation infrastructure,provincial economic scale and economic cycle.Finally,the paper gives some suggestions for improving the level of capital flow in the province.