Study of Fixed Assets Investment s Effect on the Employment of Three Industries

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1 Proceeding of the 7th International Conference on Innovation & Management 951 Study of Fixed Aet Invetment Effect on the Employment of Three Indutrie Fan Fan, Li Jing Intitute of Economic, Yangtze Univerity, Jinzhou, P.R.China,434 ( Abtract A the indutry type, fixed aet invetment pulling effect on employment will be different. While invetment ha lagged effect on employment,there hould be long-term effect and hort-term effect. By ditributed lag model, thi paper analye the impact of invetment in fixed aet on the employment of different indutrie, and by balanced multiplier pecifically tudie employment effect of different indutrie. The reult of thi tudy provide evidence for policy implementation. Key word Invetment in fixed aet; Lag effect; Balanced multiplier; Ditribution lag model 1 Introduction There are many related bibliographie about the reearch of invetment and employment,while agreement ha not been reached about whether invetment ha an pulling effect or the degree of pulling.chen Qiaoyu,Yang Yanling and Shi hubing think that fixed aet invetment i the eential way of enlarging reproduction,employment expanion need capital injection,and invetment can create employment opportunity.(fan fan and Lijing29) verify that, for the preent china reality,dometic demand mut be expanded with conumption and invetment at the core,thereby the indutry adjutment from the micro and macro apect which coordinate the relationhip between invetment and the econd indutry i the right choice of handling the financial crii and expanding employment.however, Gaolei and (Cao Chunying 29) think that,the invetment of the econd indutry,economy increae and employment influence one another directly and indirectly and long-term balanced relationhip exit among them. Invetment multiplier effect i in favor of increaing the rate of employment, meanwhile in the proce of invetment it will promote the improvement of the tructure of corporation technology, capital and property right.from the perpective of invetment in human capital. (Cai Xinhui 29) wa explaining invetment expenditure in education,ocial ecurity and training,etc ha a poitive function againt enhancing labor quality and the rate of employment exemplified invetment in human capital ha a poitive lead on employment.while ome other cholar hold an oppoite opinion,according to the invetment ` elatic analyi for interet,he Feng found that under the condition of invetment increae ha been fixed,invetment for interet elatic i the crucial factor confined the increae of employment,when invetment againt interet elatic i le than 1,dometic invetment increae not only can t upheaval the rate of employment,alo influence to decreae the rate of employment.economit (LI Yining28) from the china preent reality alo think invetment in infratructure contruction may not enhance employment. In order to add and mend the above-mentioned,at the bai of thi paper need and data acceibility.according to China tatitical yearbook and the webite of China tatitical beau,only got the relative data from In the firt, from the correlation that fixed aet invetment i with three indutrie` employment, the author analye the pulling ituation that fixed aet invetment againt all kind of indutrie` employment, Secondly, the tudy of the correlation among the three indutrie and found the intrinic link between them and according to the change affect of the three indutrie` employment, put forward the correponding policy Suggetion. 2 The Trend of Three Indutrie Employment and Fixed Aet Invetment and It Correlation Tet 2.1 The trend of invetment in fixed aet and three indutrie` employment. Figure 1 how the total employment (TE) and fixed aet invetment (IFA) change trend, figure 2 for the three indutrie of employment.during thi period, the invetment in fixed aet increae, epecially in 21 and after, more with acceleration. Meanwhile, the total employment i on rie in the ituation, but relatively teadily, not a dratic change. According to the chart 2, the firt indutry employment (FD), the rate of decline in 1985 i 63% to39.6% in28 During that period there are two drop out, and 22-26,and their decline i for 18.8% and 2.9%, Second, the

2 952 Proceeding of the 7th International Conference on Innovation & Management econd indutry employment (SD) rate overall i riing, but the rie in the range i relatively minor. By 2.8% in 1985 to 27.2% in 1994, but i lightly downward trend. At the ame time, the third indutry employment (TD) rate ha been riing. From 16.8% in 1985 to 33.2% in28.third,before 1994, the rate of econd indutrial employment i higher than the third indutry employment, but after 1994, o the peed of the rate of the third indutry employment i rapider after 1994 than the econd indutry employment. Alo can be een by figure 2, the firt indutrial employment population i till high 年 1986 年 1987 年 1988 年 1989 年 199 年 1991 年 1992 年 1993 年 1994 年 1995 年 1996 年 1997 年 1998 年 1999 年 2 年 21 年 22 年 23 年 24 年 25 年 26 年 27 年 28 年 TE IFA Figure 1 Total Employment and Fixed Aet Invetment Change Trend 年 1986 年 1987 年 1988 年 1989 年 199 年 1991 年 1992 年 1993 年 1994 年 1995 年 1996 年 1997 年 1998 年 1999 年 2 年 21 年 22 年 23 年 24 年 25 年 26 年 27 年 28 年 FD SD TD Figure 2 Three Indutrie of Employment Change Trend 2.2 The correlation between the fixed aet invetment and three indutrie employment,. By uing Eview oftware, we are to get the correlation between three indutrie employment and invetment in fixed aet and to find the inner relation between them. Table 1: pecific a follow. Table 1 The Correlation Between the Fixed Aet Invetment and Three Indutrie Employment Variable FD SD TD IFA FD SD TD From table 1.The firt indutrial job and fixed aet invetment i negatively related to the weak period, the correlation coefficient of And the econd and third indutry employment with the fixed aet invetment period ha a trong poitive correlation, correlation coefficient.883 and.846 repectively. Thi how, fixed aet invetment period, the influence of indutrial employment, and ha negative maller. However, the invetment in fixed aet in the econd and third indutry employment, can drive the econd and third indutry employment. Alo, the firt and the econd indutry that

3 Proceeding of the 7th International Conference on Innovation & Management 953 indutrial employment, the firt indutry and the third indutry employment i weak, repectively.72 - and that wa the firt indutry employment and the econd indutry employment, the third indutry employment without too much influence each other. But known from table 1, econd and third indutry employment indutrial job exit trong correlation, correlation coefficient for inverting link. Thi how that the econd indutry and the third indutry employment of employment and influenced each other. At the ame time, according to the chart 2 alo can ee the econd indutrial job and the third indutry employment trend have trong conitency. 3 Study of Fixed Aet Invetment Effect on the Employment of Three Indutrie For the fixed aet invetment ha lagged effect on pulling employment In order to quantify fixed aet invetment impact on overall employment pecifically and fixed aet invetment effect on the employment of three indutrie,o we build a ditribution lag model to analyze. 3.1 Tet of the relationhip between reaon and reult It neceary to tudy the reaon and reult relationhip of invetment and employment for the reaon of anal izing the invetment impact on employment.that i,tudying whether invetment i the caue of employment.here adopt Grange reaon and reult relationhip to tet. Table 2 Grange tet Null Hypothei: Ob F-Statitic Probability IFA doe not Granger Caue TE TE doe not Granger Caue IFA Known from the table2, under the conpicuou level of 5 percent,invetment i the caue of employment. 3.2 Study of fixed aet invetment effect on the employment of three indutrie Model building Y = α + β X + μ t i i t i = Tranform according to Almon, that i, m β i = α k() i k k = (3.1)and (3.2) correlated,o: m Y = + ( i ) k X + i = k = α α μ t k t i t (3.1) (3.2) 2 X 1 ( ) 2 ()... () m i i X i i X i m i X i t i= i= i= i= W t 1W 1t 2W 2 t... mw mt t = α + α + α + α + + α + μ = α + α + α + α + + α + μ W = Among thee, t X i W 1 = ( i) X i =, i = Regreion equitation and analyi t t i W, 2 2 = () i X t i i = (3.3) W = () i m X, i= mt i On the bai of above model,exploiting View oftware to regre and the reult of tet (een from table 1) are a following : T E = IF A IF A IF A IF A IF A IF A IF A IF A 6 7 t t 1 2 (3.4)

4 954 Proceeding of the 7th International Conference on Innovation & Management F D = I F A I F A I F A IF A IF A IF A IF A 6 t t 1 2 (3.5) S D = I F A I F A I F A IF A IF A IF A IF A IF A 6 7 T D = IF A. 1 5 IF A IF A IF A IF A IF A IF A IF A IF A IF A IF A IF A (3.6) t (3.7) Table 3 Reult of Tet Model 3.4 Model 3.5 Model 3.6 Model 3.7 lag Coe T-Statitic lag Coe T-Statitic lag Coe T-Statitic lag Coe T-Statitic DW=1.25 F= DW=2.27 F = DW=1.25 F= DW=.51 F =29.47 In light of above regreion equation,analyzing the impact of invetment againt all employment of indutrie. Firt, een from the analyi of the ame term about fixed aet invetment impact on the employment of all walk of indutrie. Known from (3.4),fixed aet invetment of the ame period ha minor and even negative impact on overall employment.contemporary increae of fixed aet invetment lead to the decent of overall employment. Meanwhile, in line with (3.5)and (3.6),referring to fixed ait effect on the employment of firt and third indutry,it influence i imilar to fixed aet invetment of the ame term on overall employment,which caued the decreae of the firt and third indutry,while(3.6) how that fixed aet invetment of the ame term ha poitive impact on the econd indutry, the invetment in fixed aet ha caued an increae in job creation of econdary indutry. Second, viewed from the analyi of fixed aet invetment ` effect on each indutry, (3.5) and (3.7) how that fixed aet invetment ` effect on the firt and third indutry have tranferred from negative to poitive,and alo the effect i enlarging. Which indicate once fixed aet been in hape, it will pull the employment of the firt and third indutry.from (3.6), fixed aet invetment ` impact on the econd indutry employment i called intant effect. Wherea, with the time paing by, the influence will decay and even take on negative effect Third, the analyi of fixed aet invetment long-term effect on each indutry, here uing total ditributed lag multiplier, that i, m= β / i + 1 to analyze. Total ditributed lag multiplier of i= influence of fixed aet invetment againt each indutry i m1=.52143(the firt indutry),m2=.715(the econd indutry), m3= (the third indutry)repectively.from the comparion of each indutry total ditributed lag multiplier. We got that : m3 >m2 >m. o to expand fixed aet invetment,the long-term effect of each indutry i different.which i larget on the third indutry,and leat on the firt indutry. At lat, from each return equation,(3.4) how that,with the time lagging,fixed aet invetment influence overall employment gradually increaing.which verify the influence ha lagged effect and the

5 Proceeding of the 7th International Conference on Innovation & Management 955 effect increae by degree.the larger the pulling effect of the early tage invetment againt employment,the pettier the pulling effect of current invetment on employment,even negative.(3.5) and (3.7) ha the ame rule with (3.4),which i,fixed aet invetment have pulling effect on the firt and third indutry. Wherea een from (3.6), the pulling effect of fixed aet invetment on the econd indutry ha complete contrary rule with other equation. the ame tern effect of fixed aet invetment againt the econd indutry i the bigget, and the lagged effect i decreaing gradually.which prove once fixed aet invetment take hape, it current effect a for the econd indutry i the larget, but with the time goe by,it effect decanting by degree, and which will provide evidence for peeding up depreciation. 3 Analyi of Reaon and Concluion Firtly, known from the above Correlation, fixed aet invetment ha weak correlation with the firth indutry employment, the reaon i it ha not pull the rural employment to increae efficiently. Meanwhile, the raie of fixed aet invetment pur on the upheaval o agricultural technology and then univeral ue of agriculture machine, o, it can reduce queezing effect of agriculture and degrade the need of labor in agriculture. Meanwhile, it can make the remain labor acend.moreover, the input of fixed aet alo hence the degree of agricultural technology, and the traditional hand baed way of agriculture i replaced by mechanim gradually. So,compared with before,agriculture need le and le labor,which made the rural remain labor tranfer into the econd and third indutry.therefore, form the hort term,fixed aet invetment ha negative effect on the employment of firt indutry,but in the long run,once fixed aet invetment ha been in cale,it will pull the employment of firt indutry efficiently. Secondly, the econd indutry i mainly conited of indutry and architecture,the cale of fixed aet invetment i very large,and in need of coniderable labor,and the pulling effect on the employment of econd indutry can take on immediately. In the meantime, from the general rule of the proce of indutrial development, in the mid-phae of indutrial development, capital indutry uch a metallurgy, machine,motorcar,iron and o on develop o fat,the hare of output value of capital indutry in the total indutry inclined to acending. In thi proce, coniderable capital i needed to meet then development of indutry, the enlargement of indutry itelf alo bring along employment effect. while, invetment caued exterior economy of econd indutry alo drive to tranform into indutry correlation.expand indutry chain to denotation.and than influence the employment tructure of related indutry.therefore,the econd expand the third indutry,the chance of the econdary employment decreae and the third increae,o once fixed aet invetment been in hape,it pull the employment of econd indutry bet, but with the time goe by,the effect of the fixed aet invetment on employment i reducing Thirdly, the reaon for the fixed aet invetment playing a poitive leading role in the third indutry employment a follow: firtly, the highly correlation between the third indutry and the econd indutry employment (correlation coefficient i.955),the longer the indutry chain related, the more multiplier invetment proce of the third indutry in order to create much more employ opportunitie. Secondly, the econd indutry can propel the development of the third indutry in the proce of the invetment, the econd indutry can create the new third indutry,the econd invetment need lead to the Effect on employment creation in term of the third indutry development. However, the fixed aet invetment ha lag effect on employment.o, the effect the fixed aet invetment i on the third indutry employment can demontrate only after the cale of invetment formed. According to the analyi of correlation between the fixed aet invetment and the variou indutrial employment and the analyi of effect that fixed aet invetment i on each indutry employment how that, in the hort run, the invetment in fixed aet i only for the econd indutry employment promotion and doe not have driven the firt and third indutry employment, even for the negative effect. But in the long run, the invetment in fixed aet ha poitive effect on the firt and third indutry employment, and the effect increaed. At the ame time, the econd indutry and the third indutry i trong poitive correlation and fixed aet invetment in the econd and third indutry employment effect analyi how that, the invetment in fixed aet i "create employment effect". Therefore, thi paper verified the third indutry i main "channel" for aborbing the employment, alo cannot ignore the long-term effect of firt indutry employment. But only for hort-term, invetment in fixed aet ha driving effect. on the econd indutry employment.

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