Research On The Mechanism Of Returns To Scale Of China's Economic Growth

Since the beginning of the reform and opening,Chinese economic growth has been made a great leap in quantity because of the method of different resource and factor inputs to economy.But because of the extensive mode of growth and dependent of factor inputs to economic growth,China's growth rate has been declining since 2010 and other disadvantages has been revealed.In this case,the mode of growth must be transformed from non-increasing returns to scale to increasing returns to scale.Under this kind of circumstance,this paper studies the key factors affecting the increasing returns to scale and proposes some suggestions.Firstly,this paper analyzes the characteristics of China's long run economic growth,and evaluate the detailed status of long run growth.An analysis of development of three industries indicates that the coming of low rate growth stage,diminishing of traditional bonus to growth,and lack of technical progress and labor division and specification.Secondly,this paper analyzes the returns to scale of different economic sphere.Specifically,by constructing the production function,this paper indicates the assumption of increasing returns to scale is reasonable,and by using EDA method to measure the different status of different industries and sectors in economy to indicate most industries are non-increasing returns to scale.Next,by summarizing literature and analyzing real economic development,this paper gives the factors affecting the increasing returns to scale and how they work.This research indicates that there are three key factors including external factors,labor division and specification and market structure.In external factors,increasing of knowledge and technology spillover by FDI investment,technology self-innovation by R&D investment and enhancing of labor quality by human resource investment are three main paths to direct technical progress.Then,constructs a empirical model to analyze the how much factor affecting the increasing returns to scale.Finally,by analyzing the result of empirical model,this paper gives suggestions and the question need to be solved further.