Investment And Financing In Underdeveloped Areas

Investment, consumption and export are the three major driving force of China’s economic growth, but because of China’s underdeveloped areas exist exports are not developed, per capita income is too low, resulting in less power consumption problem, therefore, investment in stimulating economic growth in developed areas in the role than in other areas is more important. Capital is always an important bottleneck to restrict the development of underdeveloped areas of china. For a long time, China’s economic growth mainly depends on investment, in the less developed regions, the more capital is the first impetus of economic growth. The underdeveloped areas are facing the difficult task of industrialization, the city, the process of industrialization, in the less developed areas of the city, a large number of agricultural labor transfer to the industrial sector will. The new labor force will have to increase capital incremental demand, and the investment and financing is the effective means which can make up for the capital increment, therefore, to study the underdeveloped areas of investment and financing is very necessary.This paper first describes the theoretical basis of the investment and financing for development of underdeveloped areas:capital formation theory,from the capital formation to the promotion of economic development and the lack of capital in two aspects, impede the economic development demonstrates the importance of capital formation and economic development. Then, based on the actual condition of the underdeveloped areas, taking Guizhou Province as an example, a comprehensive analysis of the financing situation of underdeveloped areas and its characteristics, from a rather macroscopic perspective to analyze the relationship between investment and economic development.Between the investment in Guizhou province and other economic variables are analyzed, further analysis of the impact of investment and financing of economic development in underdeveloped areas.This paper mainly focuses on the study of investment variables, to analyze the investment effect on other important economic variables by constructing the VAR model, in order to determine the role of investment in less developed regions in economic development. Through the VAR model can be used to quantify this effect, which can let us understand the effect of investment on economic effect is more intuitive. From the results of the analysis point of view, the impact of an investment on economy in the underdeveloped area and did not play a leading role in our view of the, therefore, In order to make the investment and financing to serve the economic development better, we should create a good investment and financing environment, explore the restricting factors of investment and financing development and put forward corresponding countermeasures of the investment and financing system.