Theoretical And Empirical Study Of China’s Investment Behabior In Transition Period

The rate of capital formation is very high in China,and keep rising in recent years. It is not only higher than developed countries,but also higher than emerging economies.Investment can create demand and supply.Its dual function has promoted China’s continued growth over years.So,We think that China’s economic growth mode is the mode relying on investment.Because investment is volatile,it also drives economic fluctuation. Investment plays an important role on the economic stage,so China’s macroeconomic policies often focus on investment.To investigate investment behavior and its decision mechanism is significant for exploring the regularity and future trend of China’s economic development.This paper applies scientific thinking form and normative research method to analyze China’s investment behavior. The research route is as following.From the particular to the general,this paper firstly concludes stylized facts of China’s investment behavior in the transition period by comparing and analyzing real materials.Then this paper selects several variables from fundamental and financial factors to explore effects of these variables to regional investment,industry investment and corporate investment.The possible reasons for consistence or incompatibilities between empirical results and theoretical propositions are discussed.Finally,conclusions are raised based on the above analysis and several relevant policy advices are put forward.In the introduction chapter, this paper proposes the research object,then introduces the research route,research content and possible innovation and shortage. In the second chapter, the paper reviews the foreign literatures about theoretical model and empirical results of investment,then reviews China’s theoretical and empirical literatures about investment. In the third chapter,the paper statistically analyzes investment situation since reform and opening up from total and structural perspective,and describes evolutionary trends and structural changes of investment to provide realistic material for further studies.Based on the stylized fact that overcapacity,credit expansion and regional investment growth coexist in the transition period, In the fourth charter,this paper constructs a theoretical model of investment to investigate the mechanism of capacity utilization and credit expansion on investment behavior. Using provincial panal data to empirically test,we find that capacity utilization has a positive but not significant impact on investment,and credit expansion has a substantially positive impact on investment. Subsample analysis indicates that the effects of capacity utilization and credit expansion on investment is different in different rigons and differet periods.This paper analyzes the reasons for this difference from the perspective of unbalanced development of regional economy,macroeconomic policy and economic system transformation.Industry investment efficiency which reflects the quality of investment is constrained by the specific institutional environment.The fifth charper explains the mechanism of government intervention and financial deepening on industry investment efficiency and propoes research hypotheses accordingly.Then the paper empirically examines these hypotheses by using industrial panal data.The results indicate that financial deepening can improve industry investment efficiency,but this improvement is subject to government intervention.Specifically, interventions by government on bank’s loan decisions and the flow of financial resources weaken the effect of improving industry investment efficiency.Wage costs tend to rise with the gradual digestion of surplus labor,and China’s central bank frequently adjusts benchmark interest rate with the market-oriented reform of interest rate.Under this background,the sixth charpter constructs a model of corporate investment decision concluding wage and interest rate and propoes theoretical propositions. Then the paper empirically examines these propositions by using corporate panal data. The results show that wage costs have a positive impact on corporate investment,and current interest rates have a negative impact on investment.But these impacts is subject to the nature of ownership and the degree of marketization.The expected interest rates of next period have negative impacts on the investment of private companies or investment of companies which are in the regions with the higher degree of marketization,but have no impacts on other companies.The seventh charpter summarizes the main conclusions of the full thesis based on the theoretical and empirical analysis of the former.Then,the paper puts forward relevant policy advices about the correction of investment behavior,the improvement of industry investment effiency and the transformation of economic growth mode.Moreover,this paper suggests "three transformations" as temporary lodging of the full text,i.e, transformation of government role,transformation of investment direction and transformation of corporate behavior.Overall,this paper takes into account fundamental and financial factors with the characteristics of transitional economy to abstract investment models conformed to the Chinese practice,and this paper has broke through the mainstream of investment theory constructed under the perfect market economy conditions.Investment behaviors of different levels have systematic differences because of individual heterogeneity. So,this paper studies regional investment,industry investment and corporate investment,respectively. Which can help us undersand and interpret China’s investment behavior in the transition period completely and systematically.This paper expands and enriches the existing researches on investment behavior.