Capital Efficiency And Economic Growth

The relationship between capital efficiency and economic growth is an important field in economics, and also a subject stimulating challenge. This dissertation is based on disperse capital theories, economic growth theories and the relating theories within Marxist economics and western economics. Resource allocation-effect analysis method, X-efficiency theory and the conception of " relative efficiency" are applied to the measurement of capital allocation efficiency and its contribution to economic growth in China. From the point of view of positive and theoretic analysis, this dissertation discusses the effect of capital efficiency on economic growth.The dissertation is divided into five chapters. Chapter one starts with a systematical summary of the existing capital theories, economic growth theories, the relating ideas and methods. Then the main points of Western capital theory and Marxist Socialist economic growth theory are presented by working through the evolution process of economic growth theories. At last, using the former definitions of economic efficiency and capital efficiency as reference, capital efficiency is defined as the capital allocation form hi Pareto optimum.Chapter two focuses on the formation and measurement of capital. The gap between savings and investment in China is analyzed in both theoretic and positive views. The conclusion is provided that the insufficient transformation of domestic savings to practical investment shows the problems of stagnant investment and inadequate investment exist in economic growth process in China. Robinson's research on capital evaluation, Jorgenson and Denision's methods of measurement for capital input, and other several methods of capital measurement, as well as the methods measuring China's capital stock, are Introduced.Chapter three and chapter four give the theoretic and practical analysis of the relationship between capital efficiency and economic growth, hi chapter three, the effects of the structural allocation of industries, area allocation and the optimum allocation of capital on the economic growth were deeply discussed from the theoretic analysis. In chapter four, from the positive analysis, several researches were finished: 1) using the method of measuring capital stock of Professor Li Jingwen's to measure industries' capital stock of china; 2) investigating the efficiencies of capital accumulation, input-output and allocation of China individually; 3) applying some methods, such as the resource allocation-effect analysis method, to measure capital efficiency and its contribution to economic growth in China; 4) discussing the optimum allocation of capital and its effect on economic growth in China. These two chapters also stress the following main points: 1) Though capital is an essential factor for economic growth, its efficiency still depends on the efficiency of capital allocation, which is effected by the allocation of different industry structures in much degree. 2) The flowing of capital hi different areas will strength the economy connection in theseareas, improve the efficiency of economy activities and promote economic growth. 3) In terms of different capital investor and demander, the condition for optimum allocation is as follows: the capital marginal transformation ratio of demander is equal to the capital marginal substitute ratio of producer, which means that the supply and demand of capital achieve equilibrium of complete competition.In chapter five, it is discussed that the influences of factors of investment mechanism, capital market, financial intermediary and technology progress on capital efficiency, and some policy suggestions relating to these issues are given.