A Research On The Impact Of Capital Flow On Economic Growth In Gansu Province

The size of the regional capital stock has an important effect on the fastdevelopment of the regional economy, and the flowing of the capital is the key factorof the capital formation. At the same time, the efficiency of the flowing of capitalplays an important role in the resource allocation and economic growth of the region.Efficient and reasonable capital allocation has a significant role in promoting theregional economic growth. Recently, in order to complete the tasks of the coordinateddevelopment of the regional economy and narrowing the gap between areas, ourcountry has launched a series of policies to support the development of the westernregion. Such as the implementation of the western development strategy and in the"1025" planning our country continue to operate the strategy of western development.These policies and measures have shown that the focus of regional economic policy inour country began to shift to the western region. Located in the western of the country,the policies provide a good external environment for the rapid development ofeconomic to Gansu province, and how to make better use of capital to promote therapid development of economic becomes the most important thing in Gansu province.In view of this, this paper carries out the following research:Firstly, the article sets the background and significance of the research, and thenpresents the relevant theoretical literature about the relationship between capital flowsand economic growth at home and abroad. Finally, the article sums up five variablesof capital flow.Secondly, the basic concept and definition of capital flows, region and economicgrowth is expounded, and then discusses the relevant theories of the flow of capitaland economic growth.Thirdly, each capital flow variable and economic growth trend are analyzed bydifferent analytical methods. Through the analysis, this paper concludes that the fixedassets investment, financial revenue and expenditure and the number of bankingcapital increase with the change of years, but the trend of the direct financing ofcapital market and foreign direct investment is not obvious. However, they have large differences in the speed and mode of growth.Fourthly, according to the needs and statistics, this paper sets bank loan, financialrevenues and expenditures, fixed assets investment, market value of stock and foreigndirect investment as the independent variable which play important influences on theeconomic growth. And set1995-2010as the time span of the variables. Since theeconomic and financial data we often meet are often non-stationary time series, weexamine the steadiness of the sequence with the least square method before analyzingthe relevant relationship between each variables of capital flow and economic growth;finally we examine the practicability of the model with software. Our study showsthat financial institutions loans has a great impact on GDP, and the impact of financialinstitutions savings, fixed assets investment, government metastatic payment, foreigndirect investment, and direct financing of financial market decrease in turn.Above all, combined with the empirical analysis conclusion, the thesis proposespolicies of introduction of foreign capital, fiscal policy and financial policies topromote the economic development of Gansu province.