Mechanism Of Concentration Of Human Capital On Economic Growth In Western China

Since the implementation of the reform and opening up policy in 1978, economy in China has experienced a fast economic growth. The GDP has been growing at close to 10 per cent per annum, from 1978 to 2007, so the rapidly economic development in China has attracted worldwide attention. But there is no denying that the economic gap between regions in China's Internal is widening in economic boom today, existing gap between eastern and western China, economic downturn in northeast China and "financial collapse" in central China. Since implementing the great strategy of developing western regions in 1999, the widening the East-West economic gap has been caused more serious public concern. Well, what are the factors of the widening East-West economic gap? What factors of production play a leading role in this economic gap? And optimizing which one can we attain convergence of economy between eastern and western China in a short time.New theory of economic growth and theory of human capital have proved that the endogenous factor of economic growth is human capital, as well as human capital investment and accumulation are the important foundation for sustained economic growth. Well, whether the economic disparities between eastern and western China are leading from effect of human capital investment and accumulation? What is the economic growth mode in western China as a whole? And, employing which one can we narrow the East-West economic gap, thereby attaining convergence of economy?Admittedly, there are many specialists and scholars who make researches on human capital factor that lied in the East-West economic growth for the present, and the important role of human capital factor in the East-West economic growth is an accepted commonly research results, except for how to invest and attain convergence in human capital for economy in western China. Especially on the condition of open economy, research on the effect of regional economy in eastern and western China need to be improved, which led by loss of human capital in western China; and besides, further studies on loss of data, leading factor and empirical examination of human capital in western China should be done, which led by large "attractive force" in eastern China. As a result, research on convergence of economy between regions in Chinese Internal is more complex and more challenging than research on one country or one region on the condition of open economy.This thesis considers how to accelerate human capital accumulation in western China, while there is a stronger "attractive force" for human capital in eastern China than western China, on the condition of open economy. If concentration of human capital in western China can not be settled well, loss of human capital in western China will persist, which can lead loss of material capital as well as cut and flight of foreign material capital investment. Therefore, besides discussing the form of using education to promote human capital in western China, the key to the this thesis is also a new mode of human capital formation that makes use of mode of industry cluster and urbanization to centralize human capital, so as to further improves path dependence of human capital accumulation in western China in theory and empirical research.Main components and viewpoints in this thesis are as follow:1. This thesis summarizes and generalizes the theories of economic growth and human capital firstly, then discusses the mechanism of action of human capital on economic growth and arranges the roles and paths of human capital on economic growth, based on the theories of new classical economic and new economic growth. Thereby this thesis provides theory evidence and idea of research and analysis on human capital and economic growth, and confirms an important pushing effect on human capital towards economy growth.2. This thesis discusses the mechanism of concentration of human capital in backward regions. The main viewpoints are as follow:the main form of human capital accumulation is investment in education in backward regions, which holds out making more investment in basic education, as well as moderation in higher education, so as to touch an utmost degree on human capital stock in place; the specialized concentration of human capital mainly depends on industry cluster and urbanization, at the same time setting up a polar of the economic growth in backward regions to give full play to the advantages ofhuman capital accumulation, in order that human capital could fully play role in economic growth.3. The thesis systematically hackies and summarizes the experience of economic revitalization in different countries and regions, then it summonses and generalizes the way of human capital accumulation in these countries and regions from the perceptive of human capital. It reaches the following revelations:firstly, human capital is the necessary condition of economic growth. It can be verified by the high level of human capital accumulation in America, Japan and the "four little dragons" which are the condition precedent of rapid economic growth. Secondly, the improvement of industrial concentration and urbanization are crucial ways to accumulate human capital. And the improvement of industrial concentration and urbanization of America, Japan, the "four little dragons" and the Zhujiang River delta and the Changjiang River delta in China rapidly gathered abundant and excellent human capital. Therefore, it is worth us learning a lot from the experience of those countries and regions on accumulating human capital in the economic growth for human capital accumulation in Western China.4. The thesis has made a detailed statistics and estimation of the current situation of human capital and material capital in eastern and western China in time alignment. And the data displays a large discrepancy in human capital and material capital between two areas. Lower graded human capital in western China made the material capital get less marginal income than those in eastern China, which leads to the shortage of material capital in the western investment. Therefore, the direct reason that causes a lagging economic development in western China is the lack of investment, while the actual and deep reason of discrepancy in the material capital between the two areas is the discrepancy in human capital. Hence, strongly up raising the accumulation level of human capital and attracting material capital investment in large quantity are the primary task to solve the problem of the lagging economic development in western China. Therefore, improving the level of human capital accumulation in western China could pull more material capital, so as to accelerate the economic growth in place.5. The thesis makes utility analysis on factors that leads the human capital flow between eastern and western China. According to the analysis on the leading factors of the human capital flow, there are police geographical and many other advantages in eastern China. As a result, the eastern China has a speedy economic development, a higher GDP and inhabitant income. Meanwhile, it has much higher degree of industrial concentration and urbanization than western China. Hence, there forms a huge gravitation called "siphon" to western human capital, which presses them crowing into the eastern developed area incessantly. Moreover, the thesis makes a utility analysis on the leading factors that cause human capital flow between eastern and western China, and then it builds a relevant model. According to the model estimation and testament result from each province, there is an obvious lineate relation among the human capital flow with three variables that are specialized human capital, industrial concentration and urbanization. With a higher entire economic level, the eastern China has a strong attraction to human capital, which brings a positive effect to the human capital flow. Therefore, it uncovers the influential effect to the original human capital flow made by the specialized human capital, industrial concentration and urbanization. It is said that the key point of reducing the human capital loss in western China is to upraise the level of the three variables. This is the only way we must pass to achieve concentration of human capital, even the sustainable development of economy.6. This thesis designs routine of human capital accumulation for western China. Firstly, increasing the investment in education in western China to accumulate human capital, and government at all levels should straighten out the relationship on input-output of education with developed foresight. Meanwhile, on the chose of western educational investment, it should be emphasis on basic and vocational education, and it should keep the investment in higher education in a fictile extend so as to maximum the economic benefit of capital of educational investment. Secondly, upgrading the level of industrial concentration and urbanization to absorb inside and outside human capital. Enhancing the level of western industrial concentration can effectively realize the concentration of human capital in advanced industries, in case, there is a brain stain, the upgrade of western urbanization can gene up industrial concentration. Especially, the development of cities can effectively drive the expanding of tertiary industry, which can offer enough job vacancy for human capital accumulation. Thirdly, we need to draw up growing pole straying to develop the advantage of concentration in maximum extend so as to assemble human capital effectively. The cut of growing pole strategy can add a tendency for the states of different levels, in the distribution of investment. So as to maximum the efficiency of the investment, and use exceeding effect to drive the concentration of human capital in growing pole, meanwhile, with the emery of expanding effect, human capital will expand to secondary growing pole and lower growing pole. In this way, can we realize the economic strength improvement in the entire western China.Main innovations in this thesis are as follow:1. The innovation for the angle of view on research. Besides the universal meaning of education towards human capital accumulation, this thesis mainly demonstrates the important role of human capital accumulation from industrial concentration, urbanization and growing pole, in the research on mechanism of concentration of human capital in backward regions. Therefore, it breaches depending on the additions of investment in education to adding human capital, and widens selective route of concentration of human capital in backward regions.2. The innovation of the operation on data and processing method. This thesis adopts rational fundamental data in material capital calculation, then it strips and assesses material capital stock in eastern and western China. In the meantime, after adopting rational means of hypothesis and data processing, it estimates the material capital flow in an update way in the capital market in eastern and western China.3. The innovation of research method. This thesis makes an empirical analysis on each factor for human capital flow in eastern and western China. It obtains the estimation and examination results from each provinces, cities and districts in eastern and western China through building linear regression model. The result of empirical analysis displays that there exists remarkable linear relationship among human capital flow with three independent variables as specialized human capital, the level of industrial concentration and the ratio of urbanization, then it promulgates that above factors are the main factors of human capital flow between eastern and western China. Thus it provides a reliable theory support for the path of human capital accumulation in western China. In the selection of the growing pole in western China, using Grey Relational Analysis, this thesis selects correct indicator system, and determines three cities:Chongqing, Chengdu and Xi'an as the prior developing growing pole in western China, so as to give fully play to theirs accumulative advantages. Thus they can lead the human capital accumulation, realize using one point driver overall, and lead the whole economic strength promotion in western China.