Asset shortages and economic operating system based on two-stage least-squares regression

The rapid development of information technology and e-business has promoted financial development but has not addressed chronic asset shortages. Asset shortages are an important factor that affects enterprise operating systems and consequently influences economic growth. Using China's provincial panel data from 2001 to 2014 as sample, we use the overlapping generations model, fixed effect model, two-stage least-squares regression, and quantile regression model to explore the impact of asset shortages on economic growth. Empirical results show that asset shortages have been a perennial problem in China's provinces, thus having a significantly positive correlation with economic growth. In addition, the moderating effect of asset shortages positively influences the relationship between financial development and economic growth. These findings bear the practical implication that the government should develop information technology to increase the effective supply of sound assets.