An Empirical Analysis on the Impact of Shandong Provincial Government Size on Economic Growth

As one of the leading forces in economic development,government size has a significant impact on economic growth.This paper uses government production function and Feder model to measure and calculate the direct and indirect contribution to the Shandong province's economic growth made by the government's investment.The results of this quantitative analysis show that: the government investment can directly but not significantly promote the province's economic growth.Compared with the direct contribution,the indirect contribution is greater.Based on the results,this paper then proposes several measures for building a moderately sized government.