Infrastructure Investment Will Boost Private Investment: Findings From China's Manufacturing Enterprises Level

Infrastructure investment can exert crowd-in or crowd-out effect on private investment, and infrastructure stock can raise private firm’s productivity. This paper mainly collects China’s urban panel data from1999to2007to test the effect of urban infrastructure on private investment and technologycal progress. The GMM results indicate that the net effects of China’s urban infrastructure investment to private investment is positive and significant. This positive impact will be strengthened with the improvement of regional’s institution quality. In addition to short-term crowd-in effect, urban infrastructure stock also have a significant spillover effect of private firm’s productivity. With the scales of firm or urban expand, the crowd-in effect and spillover effect also become more and more notable.