The Structural Efficiency of Capital Investment And Long-term Growth in the Transfering Dynamic Economy
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| Title | The Structural Efficiency of Capital Investment And Long-term Growth in the Transfering Dynamic Economy
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| Author | Liu Yiqun and Huang Xianhai |
| Organization | Zhejiang University of Finance & Economics;Zhejiang University |
| Email | 68814687@qq.com；hxhhz@126.com |
| Key Words | Transfer Dynamic; Long-term Growth; Capital Structural Efficiency; Structure Boundary |
| Abstract | Capital structure efficiency is almost equal to long-term growth when capital quantity growth is no longer important. Our theoretical model explain the meanings of the structural efficiency of capital and its implications to the long-term economic growth of a country. It improves the rate of return on capital investment, the incentives of investment and the growth momentum. We use the empirical data of 107 countries and regions from 1960 to 2011 to estimate the level of the capital structural efficiency and explain its formation. The study shows that the capital structural efficiency in developed economies experienced a consistent and stable upward trend which slowed down after 2000. This is one cause of the recent stagnation. With the exception of a small number of economies, the structural efficiency of capital in most developing economies fluctuates unsteadily, with no significant increase. China and other few high-growth countries integrate technological progress into the process of capital accumulation, and obtain a higher level of capital structural efficiency through the establishment of modern industrial production system. However, on the other hand, the expansion of the capital quantity bring some of the decline in capital utilization, the capital tends to close the existing structure border of the entire economy, and the decline pressure of the efficiency of capital structure begin increasing. We suggested that it should improve the structural efficiency of capital by the innovation of capital quality, the organic connection of different types of capital and eliminating the excess capital, and expand the new boundary of economic growth. |
| Serial Number | WP1247 |
| Time | 2017-12-12 |
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