Does government investment crowd out private investment in China?

Xiaoming Xu and Yanyang Yan

Journal of Economic Policy Reform, 2014, vol. 17, issue 1, 1-12

Abstract: This paper asks whether government investment “crowds out” or “crowds in” private investment in China. We divide government capital expenditures into two types: (1) investment that serves to provide public goods and infrastructure, and (2) investment in private industry and commerce. The results of structured vector auto-regressive analysis suggest that government investment in public goods in China “crowds in” private investment significantly, while government investment in private goods, industry and commerce, mainly through state-owned enterprises, “crowds out” private investment significantly.

Date: 2014
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Citations: View citations in EconPapers (29)

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DOI: 10.1080/17487870.2013.866897

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