The Area Allocation Efficiency And The Impact On Economic Growth Of Private Capital

Before reform and opening up, the economic development of China is extensive style, in fifteen of the communist party, emphasis "change the mode of economic growth, change the situation of high income-low output and high consumption-low income", then in the seventeen party congress report highlight "speed up the way of economic development, promote the upgrading of the industrial structure". Changing the model of economic development has been outstanding problems of China’s economic. Since the reform and opening up, the investment growth include fixed asset investment growth played a leading role in the rapid development of China’s economy, and the private capital include people savings and overseas direct investment played a more and more high proportion in fixed asset investment growth. Along with the growth of total amount of private capital investment, China’s private capital’s allocation efficiency gradually obtain attention in recent years. How private capital impact China’s economic development, whether private capital’s allocation efficiency are different in different areas, what’s the different about the degree of private capital impact economic growth in different regions, and how many factors affected the economic growth of China, these questions will be discusse in this paper.Our study will define a new category of private capital, which is more in line with the actual situation of China. Divide the private capital into domestic private capital and overseas private capital, we research the area allocation efficiency and its influences on economic growth of two kinds of private capital. Considering the regional difference of China’s economic development is obvious, we make an compare analysis, discusses the differences of private capital’s area allocation efficiency and private capital impact economic growth between Eastern China, central China and western China.Based on the existing literature, make a simple descriptive statistics about the present situation of the private capital, and compare with the non-private capital, found that private capital play a more and more important role in the social fixed assets investment. Compare domestic private capital with overseas private capital, found that two types of private capital distribution are large differences in three regions. So, China’s capital are obviously not balanced between regions.We use Wurgler’s theory, study the capital’s allocation efficiency of private capital, non-private capital, domestic private capital and overseas private capital. In eastern China, central China and western China, the result show that private capital’s area allocation efficiency is not low; private capital’s area allocation efficiency is much higher than non-private capital’s; and overseas private capital’s allocation efficiency is higher than domestic private capital’s; the differences of capital’s regional allocation efficiency are significant.Through the multivariate linear regression model, and applying GMM (generalized moment estimate), this paper investigates how the two kinds of private capital effect the economic growth in Eastern China, Central China and Western China respectively. Focusing on what role the development level of China’s stock markets plays on the relationship between the private capital and the economic growth. The empirical results show that domestic private capital is significantly positive with the economic growth in all three areas, which really promote the economic growth effectively. But overseas private capital presents obvious regional differences. First, in the eastern region it stimulates economic growth significantly; Second, in the central region it hinders economic growth, influenced by the region stock market development level; Third, in western region overseas private capital has a positive coefficient, but the further researches show the small amount of overseas private capital and the low development level of stock market in western region.Finally, we summarize the conclusions of our study, give some enlightenments, and briefly analysis the limitations and future prospects of this article.