Translated Abstract
Since reform and opening up, China’s economy has been gradually entered the stage of the “new normal” which is characterized by “middle high speed, optimal structure, new engine, more challenge” after experiencing sustained rapid growth more than 30 years. In this stage, the phenomenon of the decreasing of capital marginal revenue has begun to appear, and the economic growth pattern driving by massive investment to maintain economic growth way is no longer sustainable and must need to transform the pattern with speed and scale to the pattern with quality and efficiency. on November 10, 2015 the 11th meeting of the financial and economic leading group of the Central Committee of the Communist Party of China put forward: “strengthen the structural reform of the supply side, strive to improve the quality and efficiency of the supply system, enhance the sustained growth momentum”, and on December 21, 2015 the Central Committee of the Communist Party of China in the Central Economic Work Conference further pointed out: “make innovative summary in theory, make prospective arrangement in policy, Strengthen the structural reform, correct the factor distortion, expand the effective supply, improve the adaptability and flexibility of the supply structure, improve the total factor productivity”. Obviously, it’s a very important way that transforms the Chinese economic growth pattern to the pattern with quality and efficiency through the supply side reform which can correct resource misallocation between Chinese suppliers and improve total factor productivity (TFP).
Present literature of resource misallocation focuses on two areas that the influence of resource misallocation within intra-industry and inter-industry on TFP, theoretically neglects to research resource misallocation between regions and energy misallocation, empirically choose to older data of manufacturing and neglects to test regional differences of the influence of resource misallocation on TFP in the new pattern of regional economic. Therefore, for reducing resource misallocation between Chinese suppliers and increasing the TFP, this paper, firstly, puts forward a theoretical framework that the influence of resource misallocation on China＇s TFP and expands and builds the corresponding theoretical model, based on the stylized facts of resource misallocation in China and dealing with the literature research achievements at home and abroad. Secondly, this paper uses the theoretical framework to empirically test the influence of resource misallocation on the aggregate TFP of Chinese economy and test the influence and its regional differences of resource misallocation on manufacturing employing the micro data. Finally, on the deeper analysis of causes of resource misallocation, this paper puts forward policy suggestions about releasing the dividends of the supply side reform through correcting resource misallocation between Chinese suppliers.
This paper tries to innovate in the following four aspects:
Firstly, based multiple perspectives, this paper puts forward a more complete theoretical framework of resource misallocation, expands the existing research perspective, and has certain significance on the current supply side reform. Although present literature study resource misallocation from the perspective within intra-industry and inter-industry, but neglect studying resource misallocation from the perspective of regions which correspondingly ignores the influence of market segmentation between regions on the efficiency of resource allocation in China. Therefore, this paper the influence of resource misallocation on TFP from the three perspectives of enterprise, industry and region which not only comprehensively reflects the stylized facts of resource misallocation within intra-industry, inter-industry and between regions in China, but also can compare the differently influence of the three different perspectives of resource misallocation on TFP; this laid a theoretical foundation for the empirical study of this paper, but also fits the ideas of the supply side reform that is “correct distortion of factor allocation, improve the TFP” for providing a fresh perspective of measuring the dividend of resource allocation efficiency between different suppliers(firm, county, industry).
Secondly, this paper introduce energy distortion to theoretical model of resource misallocation within intra-industry and inter-industry, which breaks through the limit of only study capital misallocation, labor misallocation and output distortion and research object of resource misallocation. Firstly, the energy is a very important input in the production function, and has extensive attention by economists; Secondly, China is a big consumer of energy and efficient allocation of energy has great significance for reducing energy intensity, improve energy efficiency and realizing green development. Therefore, research energy misallocation, analyze essential effect mechanism of energy misallocation within intra-industry and inter-industry on TFP, and propose a measuring method of the influence of energy misallocation on TFP, which not only an important improvement for current theory of resource misallocation to improve the model of the explanation ability for reality, but also reflects the stylized facts of energy misallocation in China and provides theoretical foundation for reducing energy misallocation to improve the efficiency of energy allocation.
Thirdly, build the model of resource misallocation between regions which reveals the mechanism of its effect on TFP and explicating this phenomenon that market segmentation between regions has been long with resource misallocation theory. This paper based on the research conclusion (county is a primary business organization, competition between counties is the key to explain China＇s economic miracle) from Professor Steven N. S. Cheung’s book called The Economic System of China puts forward that the county is an important medium suppler and it’s the basic unit of regional market segmentation in China. Therefore, market segmentation between regions presents market segmentation between counties whish’s influence mechanism on TFP is as follows: segmentation between counties hinders resource from county of high efficiency to county of low efficiency which results to destroy the principle of equal to marginal returns between counties and form resource misallocation between counties which further results resource misallocation between provinces and then results resource misallocation of aggregate economy. If county of high efficiency can obtain more resources, the aggregate TFP of economy will be increased through improving resource between counties.
At last, this paper comprehensively examines the influence of resource misallocation within intra-industry, inter-industry, between regions on TFP, which complements the existing empirical study in many ways. In empirical perspective, this paper examines regional difference influence of resource misallocation within intra-industry and inter-industry on aggregate TFP of manufacturing from two dimensions of transverse and longitudinal(Four Regions and the Four Economic Belts), and then other empirical results are calibrated as benchmark with the lowest resource misallocation region which effectively controls the error of measurement and parameter setting. In the empirical object, this paper firstly examines the influence of resource misallocation between regions on TFP employing micro data of the county and examines the influence of resource misallocation within intra-industry and inter-industry on TFP using the latest micro data of Chinese listed companies as samples of China＇s economy which not only improve the research timeliness, but also expand resource misallocation of the empirical object. In the empirical method, this paper adopts the comparative static method which can compare the influence of different types of resource misallocation on TFP so as to provide empirical evidence for focusing on reducing the most serious type of resource misallocation.
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