Research On China State-owned Enterprise's Transaction Costs

Resource is relatively rare in the economy-dominated society, People must pay cost in order to get it. Therefore, the rational equipment and the effective employment of resources must be efficiency-based so that the benefits can be maximized in the cost reduction. The cost question has naturally become one of the key issues in the economics study as well as the major problem focused on by economists in real world.Enterprise is a links of a series of contract. It should be the one whose production process of the unification of consumed materials and capitals as well as that of production cost and transaction cost. Any enterprise tries every means to employ new technologies and advanced approaches in its production so as to reduce the cost to the minimization, therefore, researches on the production cost have never been stopped, either by classical economists or modern administrators. Economics studies which under the hypothesis of "totally competitive market" and "zero transaction cost". It thinks that market itself can allocate the resources to the best of its utility and that the transaction process itself doesn't generate frictions and costs. So, Transaction cost which share a large proportion in the cost total is thus easy to be ignored. It is unquestionable that, apart from the alive labor costs and the materialized ones, there exists another kind of cost, namely the transaction cost, in the enterprise's production process.Transaction cost, which is still too vague, exists at any place or any time in the economic life. The theory studies oneconomics have marched forward to reality since R.Coase, a famous institutional economist, first forwarded the concept of transaction cost in 1937. Even though problems still exist in the study of transaction cost, for instance the conceptual disagreement and measurement difficulties as well as the scholars or experts' criticisms on its application to the economics researches, it is still considered a wiser approach in the economic analysis to study the economic phenomena.Great achievements have been made in the reform of state-owned enterprises (hereinafter referred to as the SOE reform), which has been implemented for years and experienced different phases and various forms. However, the difficulties are still too obvious, for instance the SOE low efficiency which is called by experts as the "syndrome of low efficiency". Is it due to the technological incompetence or the mal-administration or the HR disadvantages? None of them is the main reason, but the system. The SOE production cost has been greatly reduced in the employment of advanced technologies, excellent administrators and scientific managerial approaches. However, the transaction cost generated by the system has not been radically reduced in the SOE reforms for the lack of enough emphases. So this thesis tries to probe into the approaches for the transaction cost reduction in the analysis of relevant inner or outer mechanisms affecting the SOE efficiencies so as to offer references to SOE reforms now in China.â– EN Keywords:Transaction cost;Institutional analysis;SOE reform...