Rent-seeking Contract, Property Rights Constraints And Financial Development In China

With the flourish of New-Institutional Economics, the research of institutional topics, such as Property Rights, Contract and so on, is becoming the popular research topic. The empirical study to prove that there is significant relationship between property rights and financial development has been popular accepted, but the theoretical research to make sure the micro-mechanism of property rights and financial development is still vacant. This paper can be seen as a valuable attempt, in the view of property rights and contract under the condition of economy transition, it put emphasis on the local government behavior, rent-seeking contract and the effects of state property rights constraints on financial development during the process of financial institution transplant in China.After defining the relative definitions and the fully literature review, this paper bring out a integrated framework which based on the character of financial institution transplant and financial institution coherence in China. The framework mainly discussed the problem of weak property rights protection, finance exceeding development, cross evolution and inconsistent cost of Chinese reform during the process of Chinese economy transplant from plan to market. From the view of micro-character of property rights and financial development, rent-seeking contract and local government behavioral preference of maximizing itself utility will fall the level of public property rights protection and then it also will result in the low efficient of financial resource allocation. From the view of macro-character of property rights and financial development, this paper put the state utility function and the boundary of financial property rights into the uniform model of financial development, with which it research the staged character of financial institution evolution in China. At last, we defined the content and the structure of institutional cost of Chinese reforms and research the structural effect of asymmetric property rights protection and relative institutional cost of reforms on financial development. Based on the former research, we bring out some countermeasure and suggestion to make sure the persistent development of Chinese reforms.The academic contribution of this paper can be expressed as follow. Firstly, the topic breaks through the limits of classical property rights research which only emphasis on the empirical research but not the theoretical research and then makes useful exploration in some field. Secondly, this paper can capture the whole micro and macro characters of Chinese financial development. It can also cut in the research from the point of rent-seeking contract and the boundary of property rights and has great innovation in the view of research. Thirdly, the paper can abstract the idea of institutional cost which can always be neglected by the main-stream researchers and put the social problems of transition economy into the category of finance research. The way of thinking and research can be in the leading position.