How does the Expansion of University Enrollment affect the return on investment in China's Real Economy

Abstract

The implementation of college enrollment expansion (CEE) has a positive effect on China's human capital (HC) and is beneficial to the return on investment（ROI） in China's Real Economy (RE). This paper selects the sample data of 30 provinces (municipalities and autonomous regions) in China from 2013 to 2020, and uses the two-way fixed effect model to study the impact of CEE on the RE. The results show that there is an inverted U-shaped relationship (USR) between university enrollment expansion and the RE, indicating that when the university enrollment expansion policy reaches a certain scale, it will have a positive promoting effect on the RE. Secondly, the degree of influence of CEE on the development of RE in different regions of China is also different. Compared with the eastern regions (ER), the positive effect of CEE on the central and western regions (WR) is more obvious. Finally, the intermediary mechanism shows that CEE can improve the level of HC by training more research and development personnel, so as to achieve high-quality economic development (HQED).