Abstract:Local government investment is not only a direct allocation of resources, but also affects the flow and allocation of resources by changing the structure and distribution of public service supply. In the rapid growth stage of extensive economic growth mode, local governments tend to over-invest in the “GDP growth competition” and tend to achieve faster economic growth in the short term while ignoring the improvement of resource allocation efficiency. At the same time, in the process of rapid urbanization and the cultivation of economic growth poles, local government investment will aggravate the inequality of public services, and may promote the excessive accumulation of resources in large cities, developed regions and key areas through the “siphon effect”, thereby exacerbating regional resource mismatch. In the stage of high-quality development under the intensive economic growth mode, local government investment shifts to a moderate level, focusing on efficiency improvement and equalization of public services, which will help alleviate resource mismatch. Based on the data of 29 sample regions in China from 2007 to 2019, the analysis shows that on the whole, the increase of local government investment intensity (per capita local government investment) intensifies the regional resource mismatch to a certain extent, and the higher the dependence of the regional economy on state-owned enterprises, the greater the negative impact. When the intensity of environmental regulation is too low or too high, the increase of local government investment intensity will aggravate the resource mismatch, while under the moderate intensity of environmental regulation, the increase of local government investment intensity can alleviate the resource mismatch. The results show that the economic transformation from high-speed growth to high-quality development is beneficial to alleviating the resource mismatch of local government investment, but the radical transformation policy that spans the development stage is not conducive to the optimization of resource allocation and high-quality economic development. In the case of excessive resource allocation, the increase of local government investment intensity will aggravate the resource mismatch, while in the case of insufficient resource allocation, it will alleviate the resource mismatch. The increase of local government investment intensity in the eastern and western regions will aggravate resource mismatch, while in the central regions, it will alleviate resource mismatch. In the process of the transformation of development mode and the economy, it is necessary to further deepen the reform of the government investment system and the market-oriented allocation of factors, promote the equalization of public services, improve the flow of resources and the efficiency of allocation. Additionally, it is also necessary to comprehensively deepen the reform of state-owned enterprises and improve their productivity and capacity to allocate resources, appropriately increase the intensity of environmental regulations, and promote the optimization of regional resource allocation and high-quality economic development.