The structure of corporation capital investment and allocation with GDP competition motivation

Zhao Jing; Hao Ying

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Science Research Management ›› 2013, Vol. 34 ›› Issue (5) : 102-110.

The structure of corporation capital investment and allocation with GDP competition motivation

Zhao Jing¹, Hao Ying²

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Abstract

Since the different investment forms make different contribution to GDP growth, the impact of the GDP competition motivation on enterprise investment decisions is studied, and the crowding out effect of fixed assets investment on technology investment is found out. It shows that (1) based on the GDP competitive motivation, the local government will intervene state-owned enterprises for increasing the investment in fixed assets and decreasing technology investment; (2) considering the GDP competition, the different modes for government intervention in capital investment exist, and the state-owned enterprises controlled by Commission of the State-owned Assets Supervision and Administration(SASAC) directly has the largest scale and growth rate for fixed assets investment; (3) the influence of local government GDP competitive motivation on central enterprises capital investment is slight; (4) in the presence of GDP competition motivation, the local government intervention in the enterprise capital investment has a selection tendency for maximizing the GDP growth; the fixed assets investment not only squeezes off the technical investment, but also leads to the alienation of capital investment structure. The results are able to further improve the single appraisal system when GDP is the center index, and provide theoretical and empirical evidence for raising the level of government governance.

Key words

government intervention / capital investment / GDP competition / substitution effect

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Zhao Jing, Hao Ying. The structure of corporation capital investment and allocation with GDP competition motivation[J]. Science Research Management. 2013, 34(5): 102-110

References

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