The Positive Analysis On The Externality Of Local Regular Higher Education Finance Investment

The development of Chinese higher education mainly rely on governmentfinancial investment. Which local government finance investment in education is animportant local government public good. Domestic and foreign scholars generallyprove education can develop human resources and economic development, and highereducation can develop a higher level of talent, higher human capital that can creategreater value and promote faster development and modernization of the localeconomy. Therefore, Chinese local government must recognize that they mustdevelop education, especially the higher education. However, on the one hand, due tothe uneven economic development of all regions, financial revenue and financialinvestment in education is different, the eastern financial investment in education ismuch larger than the western regions. On the other hand, rapid economic developmentin the eastern region, a comfortable living environment and other advantages attracthigh-level talent from central and western regions, resulting in the western localgovernment finance investment in education spillover benefits that generate positiveexternalities.This paper intends to use empirical methods to verify Chinese eastern, centraland western financial investment in higher education due to the local ordinary flow ofhuman capital or labor mobility and migration technology, financial investment inhigher education format local government expenditure spillover benefits.There is an introduction and theoretical foundation in the first two chapters. Thetheory of externality, human capital, economic growth combined with highereducation, based on the understanding of higher education financial investment andhuman capital formation, economic development and other relationships anddiscusses the externalities of local higher education from a theoretical point of view,this article will defined externalities as the external economic externalities, andanalysis the manifestations and models.The third chapter analyzes the status quo where local higher education. Firstly,the various province’s in2003-2011general level of financial investment in highereducation were analyzed from a comparative analysis of local fiscal expenditure percapita higher education and general education scale, structure, and other aspects oftertiary education. Then, the eastern, central and western’s ordinary expenditure inhigher education to collate and compare can be seen in different regions have a great level differences of investment in higher education.The fourth chapter is the main innovation of this paper, through the analysis ofscholar’s research found that externalities of higher education more focus on thediscussion of social externalities, less discussion of economic externalities; multiqualitative analysis, less quantitative analysis. Therefore, this chapter will placeempirical analysis about financial input in the local higher education contribution tohuman capital and human capital contribution to economic growth, in two stagessimple regression analysis. Through the eastern, central and western local generalhigher education financial input data, human capital stock data and the economic data,the contribution rate derived local general financial and human resources into highereducation for the formation of human resources for the region’s economicdevelopment there are great differences in the contribution rate. Conclusions showthat the investment in education both Eastern, central and Western have helped togenerate local human capital, but because of the western human capital flow to theeast, resulting in only the eastern region of human capital had a positive effect on thelocal economy, while the human capital of the Midwest does not play a role inpromoting economic growth. Conclusions also proved since the transfer of humancapital, the local governments in the central and western region financial investmentin higher education make the interests spill.On the basis of empirical analysis, Chapter V give some policy about improvethe education financial investment system, personnel policy, transfer payments andother related policies to improve the external higher education. Let the easternpromote economic compensation to western regions, develop higher education in thewestern region, increase in the western region to promote the role of higher educationfor the region’s economic development and narrow the economic development gapbetween regions.