Public Expenditure And Total Factor Productivity

Since reform and opening, China's rapid economic growth mainly depends on a large number of factors inputs such as capital and labor, rather than improving total factor productivity. With the deepening of reform and opening up. This kind of extensive economic growth brought about by the waste of resources, environmental degradation, ecological destruction, economic structural imbalance and other issues have begun to affect China's sustainable economic development. Therefore, we must change the mode of economic growth, speed up technological progress and improve the quality of workers, optimize resource allocation, and all this, the key is to improve total factor productivity. This article researches total factor productivity growth problem from the perspective of public expenditure, assists China to develop a reasonable expenditure policies promote China's economic growthThis paper focuses on the public expenditure scale and the relationship between total factor productivity. First introduced on the existing public expenditure and total factor productivity theory, and then specifically describe the method of calculation of total factor productivity, Including data envelopment analysis and stochastic frontier analysis of the theoretical models, estimation and testing, etc. Then, using data envelopment analysis and stochastic frontier production function model, estimates China's total factor productivity and its decomposition, compare the results of both methods. Measured by two different methods is extremely out of part of China's TFP decomposition results can be drawn: In 1998-2008, China's economic growth is the extensive growth, TFP is showing a downward trend, and from technical efficiency change, technological change, pure technical efficiency change and scale efficiency change, China during the technology exists in the study progress, technical efficiency and scale efficiency have not been optimized, total factor productivity is also there was a certain decline, for China to maintain rapid economic growth, we must fundamentally improve total factor productivity. Then, research the relationship between public expenditure and total factor productivity by building econometric model of the amount and structure of public expenditure and total factor productivity growth.Finally, on the basis of analysis of the relationship between public spending and total factor productivity, this thesis researches the relationship between the total public expenditure and the various parts of the total factor productivity growth, s well as the relationship between the different types of public spending and the various parts of total factor productivity growth. Then, analyzes the ways public expenditures promote total factor productivity. And then, extract the mechanism public spending to promote the role of TFP growth from three separated levels, the technical progress, technical efficiency and scale efficiency. Studies have shown that total public expenditure, to some extent, will hinder the improvement of total factor productivity, the increase in administrative costs will be a serious impediment to the improvement of total factor productivity, while the increase in agricultural spending and social security benefits is positively related to TFP. Based on empirical studies have yielded three important conclusions: First, China's TFP is relatively low in general, the growth of China's economic output mainly depends on the factor inputs, rather than total factor productivity growth; Second, China's public the total expenditure elasticity of TFP is negative, the total public spending has been excessive, need to reduce the overall size of public expenditures to promote the improvement of total factor productivity; Third, the Chinese government's public expenditure structure and not in a reasonable state , we must optimize the structure of public spending, improve government efficiency in the use of public funds. Based on theoretical and empirical research,, government should slow down the growth rate of total spending, while to adjust and optimize the structure of public expenditure, particularly, should increase the general public expenditure and agricultural expenditure, promote the scientific and technological progress ,development of education, improve the efficiency of financial resources. Gradually promote the improvement of total factor productivity, thereby promoting the healthy development of the economy.