Research On The Impact Of Educational Investment On Regional Economic Growth

The Fifth Plenary Session of the 19th CPC Central Committee propose a long-term goal,which including building China into a country with powerful education and culture.In addition,they aim to achieve a obvious improvement of the quality and efficiency of economic development during the 14th Five Year Plan period.Taking consideration of how to improve efficiency and quality of development,we utilize the macroeconomic data from the National Bureau of statistics to make an empirical analysis,and study the influence and mechanism of education investment on regional economic growth.As a national basic strategic,education investment supports our country’s long-term development.It is also the material base of rejuvenating China through science and education.Nowadays fiscal education expenditure is the main means of education investment in China,which occupies a very large part of local government fiscal expenditure.Moreover,it accounts for an increasing proportion of GDP in recent years.Many scholars have also done empirical research on the impact of fiscal education expenditure on economic growth,but there are still few studies on the mechanism behind that.In addition,what the heterogeneity is among different regions.Trying to solve these difficulties,firstly,we build the relationship between fiscal education expenditure and economic growth by the extended Cobb Douglas production function.Then we conduct a regression analysis by provincial panel data and study the impact of local fiscal education expenditure on regional economic growth.To further reveal the mechanism of fiscal education expenditure’s impact on economic growth,we construct a mediating effect model from the perspective of human capital and knowledge capital.The impacts of fiscal education investment on economic growth are identified as two parts:the first part is the direct impact of financial education Investment on economic growth,and the second part is the indirect impact of financial education investment on regional economic growth through affecting human capital and knowledge capital growth.Our results show that fiscal education investment has both direct and indirect impact on economic growth.Next,we measure the mediating effects in the four regions of East,middle,West and Northeast China,and test whether there are differences of the direct and indirect effects among the regions.Then,we give some reasonable explanations for this heterogeneity.Based on the above analysis,we draw a conclusion.First,financial investment in education has a significant direct role in promoting economic growth in the whole country;Second,from the perspective of mediating effect’s regional heterogeneity,only the eastern region has the most significant mediating effect,while the other regions are not significant.As for policy recommendations,on one hand,we suggested that local governments continue to increase financial education investment,make good use of financial leverage,and focus on solving the problem of dropout due to poverty and lack of investment;On the other hand,it is more necessary to set up talent introduction policies according to local conditions,import high-tech industries,provide financing support for talent entrepreneurship and enterprise innovation,create a good business environment,and make full use of talent and technology elements,so as to achieve high-quality development of regional economy.