Influence Study Of Public Spending On Total Factor Productivity

Since reform and opening, over the past30years, Chinese achievements attractworldwide attention, especially the rapid economic growth, the comprehensive nationalstrength further promotes, annual GDP growth of about9.7%, an average annual growthrate higher than the same period in3.27%of the world economy, the increasing speed isknown as the "China miracle", which shocked the world.Yet China’s economy has longmaintained an extensive high-speed growth, relying mainly on investment and exports,there are a lot of high energy consumption and high pollution investment, lowinvestment efficiency substances; these issues can not be ignored in the economy willlead to a series of imbalances.And the way of economic growth will lead to waste ofresources phenomenon, the ecological environment destruction and damage done by theconstruction of ecological civilization in our country. Besides, oil, coal these resourcesis non-renewable, can’t the exploitation of forever, so we must change the mode ofeconomic development to ensure sustained and stable growth of China’s economy. Witheconomic development, TFP has become the object of scholars concern, becoming thecore factor of economic growth. Through the perspective of public spendingto exploreTFP problems for the Chinese government to develop a reasonable and feasible fiscalexpenditure policy. Further reform of the financial system through the transformation ofour country to achieve economic development, It has some theoretical and practicalsignificance, And also match the party’s18, and tax reform spirit of the Third PlenarySession of eighteen.This article revolves around the research on the effects of public expenditure tototal factor productivity, on the basis of existing literature at home and abroad,introduces the commonly used the method of total factor productivity at home andabroad, Solow residual method, the method of data envelopment analysis and stochasticfrontier analysis method, and to study the impacts of public expenditure to total factorproductivity, and this paper uses data envelopment analysis to estimate and decomposeTFPAccording to decomposition results can be learned: between2007-2012, China’seconomic growth is still dominated by the extensive growth, the contribution of TFP istoo small, TFP has unstable trends, but TFP are recession, and from the rate of changefrom the technical efficiency, technological progress rate of change and scale efficiencychange we can know that, between2007-2012, technical efficiency, technologicalprogress, scale efficiency, totalfactor productivity are ups and downs, the overall downward trend. Therefore, China wants to maintain high-speed development, we mustuse the perspective of public spending to increase total factor productivity. Then bybuilding public expenditure total amount and structure for the measurement of theamount of total factor productivity and its decomposition influence model, to draw onthe impact of public spending on total factor productivity mechanism.Finally, through the stata results, we analysis the relationship between the totalpublic spending and total factor productivity, as well as the public expenditure structureand the relationship between the total factor productivity We can know which publicexpenditure structure has been promoting the growth of total factor productivity, andthus from the three levels of decomposition on technical efficiency, technologicalprogress, scale efficiency and public expenditure mechanisms. Studies have shown thattotal public expenditure, to some extent, will promote the improvement of total factorproductivity significantly, social security expenditure and general public servicesspending were improving TFP positive and negatively respectively, but the results arenot significant, while health expenditure and education spending is a significant role inpromoting total factor productivity, health care spending and education spendingincreases will promote the increase in total factor productivity.Based on empiricalstudies have yielded three important conclusions:: First, a general TFP contribution toeconomic growth is very small, China’s economic growth is dependent on the factor ofinputs still; Second, between total public spending and TFP the elasticity coefficient ispositive, we can see that the total increase in public spending will increase significantlyTFP growth; third optimize the structure of public spending, raising TFP growth rates.Propose policy recommendations based on the conclusions: One, the transformation ofgovernment functions, improve the public finance system to improve expenditureefficiency; Two, optimize the structure of public spending, increase the proportion ofbasic public investment and investment in education; three, increased R&D expenses;four effective guide for foreign direct investment. FiveOptimize theexport structure,increase the importsmoderateThus, you can promote the healthy development of theeconomy.