Research On The Impact Of China's Fiscal Expenditure On Total Factor Productivity

Reform and opening up more than 30 years,the Chinese economy remained at 9% growth rate.But it is generally believed that this is to rely on capital,labor and other factors of production a lot of inputs.Total factor productivity has little effect.With China’s economy entering a new normal state,the constraints on the economic growth of resources and environment have been strengthened,and the extensive economic development mode is facing great challenges.Will China fall into the middle income trap and suffer from "Latin American Disease","India Disease " has become a major concern of the community major issues.At present,the central government put forward the policy of implementing the structural reform on the supply side,changing the supply structure and improving the supply quality through the policy of tax reduction and deregulation,and expecting to effectively improve the total factor productivity so as to bypass the middle income trap and realize the healthy and sustainable development of the economy.As the foundation and important pillar of state governance,finance has been placed high expectations on the supply side structural reform.Mainstream economists advocate that we should increase the financial investment in science and technology,education and other fields,consolidate the basis of China’s economic growth and improve the quality of economic growth,so that all factor productivity has become the main driving force of China’s economic growth,the Chinese economy will be thorough Get rid of the dilemma of relying on factors.In the context of the government-led market economy,this idea is not surprising.But depends on the increase in government spending,whether the effective increase in total factor productivity? Does the government play a leading role in improving total factor productivity and will it have a "crowding out" effect on market forces? Under the enormous financial pressure of all levels of government,is this special item spending expansion policy sustainable? These questions are worthy of further inquiry at the theoretical and practical level.This paper attempts to solve these problems,from the scale of fiscal expenditure and structure of the two levels of financial expenditure on the total factor productivity of the actual impact,and then put forward the supply side of the structural reform to improve the overall factor productivity countermeasures and propositions.In terms of the size of fiscal expenditure,the study shows that fiscal expenditure has a positive effect on total factor productivity.The impact of different types of fiscal expenditure on total factor productivity is also different: economic development expenditure affects all factor productivity by increasing capital stock.The impact of a positive effect,the strength of 0.0129;defense and security expenditure by affecting the production costs,foreign direct investment and social R & D investment to affect the total factor productivity,showing a positive effect,the intensity of 0.0245;education and scientific and technological expenditure through the increase in human capital,The effect of administrative innovation on the total factor productivity is negative and the intensity is-0.377.Social welfare expenditure affects the total factor productivity by increasing the supply of labor force,showing positive Effect,strength of 0.0219.The conclusion is that,from a scale point of view,the government’s effective fiscal contribution policy for improving the overall factor productivity should be: a substantial increase in expenditure on economic development,defense and security spending,education and technology expenditure and social welfare expenditure,while significantly reducing administrative expenses.However,as a government with both political,economic and social functions,the adjustment of expenditure structure is limited.Based on the study of expenditure structure,this paper shows that because of the double restriction of fiscal expenditure scale and government function,the government can not increase or reduce the financial expenditure in a given area.Even though China transform its Fiscal policy from Constructive type to Welfare type,the range of expenditure adjustments is limited.Therefore,large-scale increase in education,science and technology to enhance the total factor productivity is difficult to sustain.The impact of fiscal expenditure on the total factor productivity is limited.The real rise of the market and self-improvement is the ultimate solution.