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Impact of Public Investment on Private Investment in China: Crowd-out or Crowd-in?
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TitleImpact of Public Investment on Private Investment in China: Crowd-out or Crowd-in?  
AuthorLiu Shenglong, Yan Yilong and Hu Angang  
OrganizationChinese Academy of Social Sciences;Tsinghua University;。 
Key Wordspublic investment; private investment; crowd-out effects; crowd-in effects 
AbstractThis paper tests the impacts of China’s public investment on private investment. Firstly, a simple theoretical analysis indicates that public investment has both positive and negative impacts on private investment, while the improvement of institute quality will promote private investment through raising the efficiency of public investment and reducing the cost of private investment. Next, based on China’s provincial panel data of 1995-2012, the empirical results of this study show that China's public investment significantly promote private investment, which is possibly due to the main direction of China's public investment is infrastructure, human capital and etc., which are useful complementarities on private investment. The empirical results of this paper also indicate that improvement of institute quality will significantly promote private enterprises investment, while it has no significant impacts on state-owned enterprises investment.  
Serial NumberWP670 
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