Abstract

This paper investigates the impacts of government education expenditure on economic growth in China taking into account the spatial third-party spillover effects. After the theretical analyse, a spatial panel estimation model based on the augmented Solow model is applied by using province data in China during 2007 and 2013. The results reveal that (1) In a whole, Government education expenditure in China has significantly positive impact on economic growth, but expenditure in different educational level shows different results. Government education expenditure in below high-education is positive related to local economic growth, whereas the effect of education expenditure in high-education is insignificant. (2) Neighboring government education expenditure shows spatial spillover effects on local economic growth, and spatial spillover effects in two education level is different. (3) Other input factors of third-governmet also have spatial effects. Some policies about education and economic development are proposed. Meanwhile this study recommends that corporation relationship among regions is very important.

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