Research On Collaborative Development Problem Of Government Investment And Private Investment

Since the reform and opening-up, investment pulling has been one of the main pulling forces of China’s sustained and rapid economic development. Investment, especially government investment is the major force in pulling national economic growth, but private investment’s development also plays a huge role in promoting China’s economic growth, structural adjustment and marketization progress. According to different investment subjects, investment can be divided into government investment, private investment and foreign direct investment. Influenced by natural characteristics and external factors, the effectivenesses from government investment and private investment in pulling economic growth are different. In short time, government investment is the main force in mitigating economic crisis, maintaining growth and adjusting structure. But, in long term, private investment are the main way to build an endogenous dynamic mechanism of economic growth and the key to maintaining sustainable economic growth. While, all these depend on how government investment and private investment collaborate and cooperate with each other effectively. Therefore, research on collaborative development problem of government investment and private investment has a very important theoretical and practical significance in expanding investment demand effectively, speeding up the transformation of economic development model and so on.From the historical review between government investment and private investment’s collaborative development, we find that government investment shifting and private investment growing gradually are the main theme through analysing historical evolution and main features. But private investment is the most vulnerable to the impact of government investment and economic fluctuation. With the help of VAR model, we carry out an empirical analysis on internal function mechanisms between government investment and private investment’s collaborative development. Finding that the contribution from government investment is more than private investment’s on economic growth, the former would have three effects on the latter including "crowding out" effect,"crowding in" effect and "zero sum" effect. In different economic growth periods and conditions, three effects are different which are analysed by impulse response function and variance decomposition. Then the paper probes into problems and reasons of government investment and private investment in collaborative development, borrows experience and practices from the United States, Japan and other major developed countries and finally puts forward effective path choices about government investment and private investment in collaborative development including to continue to transform government’s investment function and optimize private investment environment still more, to further optimize government investment structure and broaden the fields of private investment, to establish incentive and restraint mechanisms of government invest and private investment and enhance investment’s effectiveness, to build multi-level financing system and emphatically solve the problem of financing difficulty from private investment, to improve comprehensive quality of private economy and guide transformation and upgrading of private enterprises.The main research distinguishing features lie in two aspects. First, the research perspective is relatively new. From the perspective of historical review, the paper analyses historical evolution process and main features and then further analyses empirically internal function mechanism between government invest and private investment’s collaborative development by virtue of VAR mode. These mechanisms includes pulling economic growth collaboratively and that the former would have multiple effects on the latter. Second, research methods are various. There are abstract method from specific to general from philosophical level, combination of normative and empirical analysis and also system and comparative analysis.