Economic Analysis of the Financial Supporting Policy in the Economic Development Zones
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Abstract:
This paper makes an economic analysis of the Financial Supporting Policy to invite outside investments in the Economic Development Zones(EDZs),deduces the formula of the optimal ratio of the quantity of financial support to the local financial income and draws figures of the curve.The EDZs should consider the effectiveness of financial subsidy before they use this policy;technical progress is the precondition of subsidy.The Financial Supporting Policy should first help those industries that can promote local economic growth best get subsidy.Under the conditions of low initial economic level and subsidy combining with other preferred policies,the ratio of financial subsidy should reduce;properly by prolonging the time limit and the EDZs' paying more attention to long-run objection lead to lower subsidy ratio.
