Infrastructure Investment And Economic Growth

In recent years, China has constantly increased investment in infrastructure. From 1995 to 2008, the proportion that infrastructure investment accounted for total social fixed assets investment increased from 13.8% to 15.2%. Especially in 2009, China spent investment reached up to 150 billion yuan to infrastructure, which accounted for 37.5% in the total amount of funds. Yunnan Province that is a less developed western province has put the infrastructure construction on the important position in economic development for a long time. From 1988 to 2009, the infrastructure investment in Yunnan Province increased by 128.6 times. Especially from 2006 to 2009 the average proportion that infrastructure investment accounted for the local GDP reached up to 22%. With the trend of growing of infrastructure investment in China, more and more scholars are interested in the field. Therefore, this article taking the relationship between infrastructure investment and economic growth as a breakthrough point, was written with the purpose of realizing two basic goals as follows. On the one hand, discuss the inverted U relationship between infrastructure investment and economic growth, and exist a optimal proportion. On the other hand, use the infrastructure investment data of Yunnan Province from 1988 to 2009 to estimate the optimal proportion of infrastructure investment of Yunnan Province.The research ideas and central content about this article mainly includes as follows. To begin with, carry on a brief review about the research of foreign and domestic scholars on the relationship between infrastructure investment and economic growth. On the basis above, the opinion of this article is that the relationship between infrastructure investment and economic growth is the inverted U shape. What's more, the theoretical analysis not only discusses that the rational infrastructure investment accelerates economic growth and the excessive infrastructure investment handicaps economic growth from the qualitative point of view, but also discusses the inverted U relationship between infrastructure investment and economic growth from the quantitative point of view. Next, according to Barro(1990) model, the article builds a autoregressive distributed lag econometric model to estimate the optimal proportion of infrastructure investment of Yunnan Province. Finally, the article draws the conclusions and policy recommendations on the basis of the empirical analysis.Through the analysis we draw the following conclusions: the optimal proportion of infrastructure investment of Yunnan Province is 18.1163%. The optimal proportion of power industry , transport sector, posts and telecommunications industry, educational institutions and scientific research institutions of Yunnan Province is 7.0095%, 7.8852%, 1.2014%, 3.6881% and 0.3285%. Therefore, Yunnan Province should gradually slow down the infrastructure investment proportion. Meanwhile, Yunnan Province should moderately reduce the infrastructure investment proportion of power industry and transport sector, keep the infrastructure investment proportion of posts and telecommunications industry and increase the infrastructure investment proportion of educational institutions and scientific research institutions.