Government Behavior, Financial Structure and Total Factor Productivity

On the basis of the theoretical analysis and the underlying assumptions,this paper analyzes the relationship among the government behavior,financial structure and total factor productivity by using provincial Panel Data from 1997-2010.The results show that different subjects of government fiscal spending and financial markets has different impact on TFP.In the country as well as the eastern and western regions,government education spending significantly promote the improvement of the total factor productivity,and the effect of the western region is the most obvious.Other fiscal expenditure projects did not play its positive effect on TFP.Furthermore,Malmquist is used in this paper to decompose total factor productivity into technical efficiency index and the index of technological progress in order to examine the internal mechanism that how government behavior and financial structure accelerate the total factor productivity.