Empirical Research On China's Local TFP Growth And Its Fiscal Expenditures Effects(1998-2015)

In recent years,with China's economy entering “New Normal”,the appeal to the transformation of development mode is increasingly intense.Under this background,General secretary Xi Jinping proposes “Structural reform of the supply front”,which refers to adjusting economic structure and comprehensively improving the quality of economic growth from technical progress of supply front,improvement of efficiency,factors allocation and etc.Total factor productivity concentratively reflects the quality of economy growth.The course of history demonstrates that the reason why western countries can maintain high development level depends on the sustainable growth of total factor productivity.Therefore,the deep research on total factor productivity and influential factors have important realistic meaning for current development of China.Based on the above comprehension,in accordance with the data of 30 provincial units in China from 1998 to 2015,this paper,firstly utilizing stochastic frontier analysis and adopting flexible trans-log production function,decomposes economic growth rate of different provinces into the change of factors input,scale effects,technical progress and technical efficiency.Then the paper utilizes the total of last three parts to generate the growth rate of total factor productivity of provinces,with expect to learn about the variation of total factor productivity in local area over the years.The result of test demonstrates that: 1,the average growth rate of total factor productivity in different provinces is 4.97%,decreasing after increasing,presenting the tendency of recovery in recent two years,while average contribution to economic growth caused by the change of total factor productivity is 46.76%,a little lower than the contribution made by factor input;2,the total factor productivity in local area mainly depends on technical progress while the contribution made by production efficiency is also great and its effect enjoys the tendency of gradual improvement with the implementation of a series of measure to comprehensively deepen reform.Comparatively,the changes of returns to scale have negative influence on the improvement of total factor productivity;3,compared with northeastern,middle and western area,the average growth rate and the contribution to economic growth by total factor productivity in eastern area is higher,western area second,middle area third,and northeastern area last.Furthermore,this paper firstly classifies public finance expenditures and briefly analyzes its effects on total factor productivity;then,utilize the local total factor productivity which have been measured before and the ratio of GDP by different fiscal expenditures to construct a system GMM model,estimating the influence on the former caused by the latter.The results show that: 1,the increase of the ratio of public finance expenditures will significantly reduce local total factor productivity;2,the increase of the ratio of nonproductive expenditure will also significantly reduce total factor productivity,the increase of the ratio of physical capital investment expenditure with one lag of phrase will significantly promote total factor productivity,the increase of the ratio of science and education expenditure has no significant influence on total factor productivity,the increase of the ratio of transfer expenditure can significantly rise total factor productivity;3,there is certain difference in the effect of fiscal expenditures on total factor productivity between coastal region(eastern,northeastern)and inland region(central and western).Finally,in accordance with the analysis mentioned above,the paper proposes four suggestions involving controlling gross fiscal expenditure,optimizing fiscal expenditure structure and promoting the efficiency of government organs.