The Analysis Of Regional Discrepancy On The Relationship Between Private Investment And Economic Growth Of Our Country

Since the Reform and Opening, the private investment started form scratch and is making further development. At the same time, the private investment' contribution to economic growth is more and more outstanding. From 2002, the private investment has exceeded the government, becoming the main force of our high economic growth. The change is not only in accordance with the situation of our country, but also is helpful for the fast, stable, healthy development of our country economy.With the rapid development of the economy, the regions economic grow rapidly, but the regional discrepancy is becoming more and more obvious. From the point of economic gross, the proportion of Eastern GDP is gradually increasing; the proportion of the central region with no obvious change; while the proportions of the western and northeastern regions are reducing year after year. The discrepancy has a negative effect on the development of our whole country economy. Accordingly, the unbalance development of our country regional economy has become one of the important problems.This paper firstly analyzes the economic function of private investment, and then tests regional differences of fixed assets investments by the Ginny coefficient. Finally, using the panel data model analyzes the relationship between private investment and economic growth from the four regions of our country. The whole paper consists of five chapters.The first chapter is introduction. The background and significance of this paper is analyzed, and the current situation of domestic and foreign research are reviewed and evaluated, and finally the framework of this thesis and research methods are discussed.The second chapter is mainly about some concept and theory. The meanings of economic growth and private investment are expounded, at the same time some related economic growth theory. The third chapter is the analysis of the economic function of private investment. This part analyzes the contribution of private investment on easing employment pressure, optimizing the industrial structure, promoting economic growth and pushing fixed assets investments increasing.The fourth chapter is empirical analysis of private investment and regional economic growth. Firstly, the Ginny coefficient decomposition method is used to study the contributions of foreign investment, private investment and government investment on fixed assets investment, which is revealed that the differences between regions is mainly due to regional differences of private investment. Based on the panel data model, this part analyzes the relations between private investment and economic growth from the four major regions of China.The fifth chapter is the conclusions and recommendations. Based on the analysis of the four chapters ahead, the basic conclusions of this paper are:First, the regional disparity of private investment has become the main reason for the economic gaps among the regions. Secondly, the investments'contribution to economic growth in different regions is different; the different investments' contribution to economic growth in the same area is also different. Policy recommendations are:to reduce the regional economic disparities, the central and western regions should increase private investment, and the four parts could accelerate regional economic exchanges and cooperation and so on.There are two main innovations in this paper. First, the contributions of foreign investment, private investment and government investment on fixed assets investment is studied by using the Ginny coefficient decomposition method. Second, based on the panel data model, the relations between private investment and economic growth from the four major regions of China are analyzed.