The Income Distribution Mechanism Of China’s State-owned Monopoly Industries

At present, the problem of our national income distribution has become one of the pressing problems to be solved in the reform to continue. Income distribution is not only related to the personal lives of the public, but also closely associated with social stability and national future destiny. So both the economists and the social public have attached great importance and wide spread concern to the problem.Among the present problems of national income distribution in China, the state-owned monopoly industries are the focus of the problem of national income distribution, because they receive high income which is much higher than social average, owing to their monopoly nature. Part of the state-owned monopoly industries by virtue of the monopoly conferred by the state, through free or low-cost access to state resources, or through exclusive monopoly, obtained the huge monopoly profits. And the enterprise of the state-owned monopoly with the nature of public ownership don’t use this part of huge monopoly profits to benefit all the public or improve national welfare, instead, the interests are shared by the enterprise themselves, which should belong to the public wealth. So this phenomenon has triggered a strong resentment of the income distribution system of state-owned monopolies.The income distribution mechanism of our country state-owned monopoly industries is the core issues of the existence of the phenomenon involved. Looking from the current research status, research on the part of income odd state-owned monopoly industry high problems used mainly the empirical method of research. And the study stayed on the surface, didn’t integrate into the theoretical framework of the system. Although the factors such as’The absence of owners’,’The lack of government supervision’may partly explain the phenomenon of high income of monopoly industries, such analysis is not really hit the issue of internal cause and the internal formation mechanism. Lacking of standardized analytical framework and in-depth theoretical basis, thus there is a lack of theoretical and systemic in the study. This paper studies income distribution mechanism of China’s state-owned monopoly industry. We called the formation process of income distribution of state-owned monopoly industry "mechanism" which shows that the study of this problem is a system of joint action by many mutual factors engineering. At the same time, this mechanism is not static, but showing a continuous dynamic change and developing trends. This "mechanism" relates to the interrelated aspects of all kinds, showing a complicated relationship between them which is restricting and interacting, therefore, this study focus on a comparative analysis and grasp to the’mechanism’. Compared with previous research methods which stress mainly’empirical’, this paper has the innovation in the methodology significance.At first, we established a theoretical framework model to make a distinction of state-owned economy and non-state-owned economy, monopoly and non-monopoly. On the basis of the above theoretical framework, we systematically expounded the income distribution mechanism of monopoly industry by way of comparative study. Our model includes various factors which affecting the internal income distribution in monopoly industries and their effect on the proportion of monopoly revenue. Under the background of segmentation on ownership and market structure, these factors will influence the results of final allocation through different ways. In the factors impact on the income distribution in monopoly industry, we focus on decisive role of factors about industry monopoly and ownership on industry wages, especially the interaction of the two factors, which is ignored in the previous studies. In order to prove our conclusion, we have established a wage equation that contains the control variables of the labor force characteristics, firm characteristics, markets characteristics, to study various factors impact on the income of enterprise employees and their interactions on income by using individual microscopic data.In order to show this problem more profoundly and thoroughly, on the basis of theoretical analysis, we use a variety of mathematical models and econometric empirical methods. In order to distinguish the different allocation mechanism of state-owned economy and non-state economy, we respectively establish the’profit sharing model’and’collective bargaining model’. The former can reveal the process that workers, managers of the state-owned monopoly enterprise and the government share the common monopoly profits. All of them can share the monopoly profits according to a certain proportion, while using the latter, we can fully simulate the game between employers and employees in the non-state-owned enterprise, until the market reaches the balanced wage. In addition, through the quantile regression and Blinder-Oaxaca decomposition, we measured the proportion of irrational factors in monopoly industries and other industries on income gap. According to our calculations, the income gap between the two has at least55%which is not reasonable. Finally, we use the more advanced time-varying elasticity production function model and Profile semi-parametric regression method to establish a model that can measure the proportion of corporate dividends, and estimate the dividend that part enterprise should pay through this model, got the proportion and amount of dividend that different enterprises in different earnings should pay. Through the method of mathematical model and empirical analysis, within the theoretical framework of the system to achieve a comprehensive study and clearly reveal the internal distribution system affect the monopoly industries ’mechanism’, not only with intuitive to display, but also has the scientific relative.At the same time, we also find that the problem of high income in the state-owned monopoly enterprise is not just an economic problem in the field, or a historical problem, but also a political issue. Therefore, to study this issue, we should grasp it from multiple angles, multiple dimensions, and link them organically. This paper tries to carefully and measuredly analyze and grasp the impact of various factors and their specific proportion, from the complex link of the factors which is diachronic and synchronic, In order to make an accurate and realistic address to the economic phenomenon, from the development and operation mechanism of it. Firstly, this paper reviews the historical evolution of the state-owned monopoly industries and distribution system in the course, to analyze the relationship between the state-owned monopoly and today’s state-owned economy from the historical angle, as well as the process of resource allocation power controlled by the original planned economy system gradually into the monopoly power. At the same time, we also discussed that in the distribution system, the existing state-owned monopoly industry enterprises succeeded the equalitarian ’shared’ mode of distribution of state-owned enterprises in planned economy period. Secondly, we also discuss the political background and political factors of the income in monopoly industries, from the perspective of new political economics, we re-examine the background, present situation and the difficulty to solve the problem of high income in monopoly industries. And we realized that the monopoly groups as vested interests, they rely on the government "compatibility" relations and strong political activity to block the process of reform, which also makes the reform of income distribution has been difficult to. In a word this paper tries to reveal some "mechanism" nature of the reasons of the state-owned monopoly industries with high income distribution as detailed as possible, in order to provide reference to the reform from the aspect of theory particular in practice.For solving the problems of abnormal high income of state-owned monopoly distortion, this paper offers a proposal of improving the monopoly state-owned enterprises dividends policy. The bonus system can reduce the amount of retained funds in monopoly enterprise group, plays a function of constrain to blind investment and internal interest of monopoly enterprise group. Although from2007,the state began to collect dividends of state-owned enterprises, but through our research, we found that the effect is not ideal. On the one hand, the vast majority of dividend returns to the enterprise through fiscal expenditure, while the proportion of the dividend used for the construction of people’s livelihood, public demand and the social security is low. On the other hand, the dividend ratio of the state-owned monopoly enterprise collection is low. This is another important factor.The main conclusions of this paper are as follows. As a kind of "mechanism", the high income of monopoly industries is a systems engineering with many other factors. From the historical point of view, derived from the state-owned enterprises, the state-owned monopoly enterprise’inherited’the profit sharing mode of the traditional state-owned enterprises, under the protection of the huge monopoly profits, the ’average’high income in the monopoly industries becomes possible. From the distributive point of view, the allocation of state-owned monopoly industries are more inclined to internal stuffs. The enterprises of state-owned monopoly are economic forms that the state-owned economy are their main body, workers as the owner and not merely as the labor suppliers participate in the production and distribution of public ownership economy, with consistency and non-confrontational endogenous between state-owned monopoly enterprise capital owners, managers and workers workers and business owners share the profits of the enterprise, the get part of the monopoly capitals. From the new political economics point of view, the reason why the allocation reform of the monopoly industries is difficult to promote, is that the vested pressure groups, including the executives of state-owned monopoly enterprises, are strongly block the course of the reform. Because the interests between monopoly groups and government regulation groups exist "compatibility", as well as the monopoly groups has the powerful economic and political discourse, they occupy the dominant position in the game with other interest groups. At the end of the paper, improve the bonus system of the state-owned enterprises is an effective way to resolve the problem of abnormally high income of state-owned monopoly. But in the process of dividends of the state-owned enterprises, there still exist some problems which This is another important factorThe framework of the paper is organized as follows:The first chapter, firstly, according to the high income phenomenon in China’s state-owned monopoly industry, we put forward the research proposition of this paper. And then the research ideas, research methods, the main content of this article, the technical route and the main innovation points and shortcomings are brielly described. Meanwhile, we define the important concepts in the paper. The second chapter, this paper introduces the related theories and literature review. Relevant theory firstly use; and then we describes the current domestic and international research in the field, and sort out the important research literatures. Now, Systematic study for the literature and in-depth excavation work of this field is still relatively lacking, so in this chapter, we based on the location, summarized and reviewed the relevant literature from two dimensions. which includes not only the summary of present situation, cause analysis, describe the reform proposals and other aspects of the literature of state-owned monopoly industries of our country, but also includes the use of the literature summary of theoretical models and empirical analysis and summary.The third chapter, we review and analyze the history of reform of the state-owned economy, state-owned monopoly industry and distribution system. Through research, we found that problems highlights in state-owned monopoly industry are some residual forms, to a large extent, which is the traditional planned economy system shows during the period of transformation. At the same time, in the process of market economy reform, the state-owned monopoly industries emerge new changes and show new features. Therefore, many problems exist in China’s state-owned monopoly industries can find the root from the change and evolution of history. This paper focuses on the research on the basic system and its change rule associated with the income distribution mechanism of state-owned monopoly industries. Analyzes and states various systems that affect the income distribution mechanism of state-owned monopoly industry, since the founding of new China to the present stage. And make a comparison analysis and an exploration of the reasons to different conditions as time goes on.The fourth chapter is theoretical analysis. Many principles of economics are to explain the problem distribution and income differences in income, but not every theory can make perfect explanation to the existing problems. Therefore, we try to analyze and explain the questions using different theories. And then built a theoretical model to distinguish state-owned economy, non-state-owned economy, monopoly and non-monopoly. And based on the theoretical model, we make a comparative study on the difference to internal allocation mechanism between the state-owned monopoly enterprise and non state-owned enterprise. Also, we analyzes the difference on wage determination mechanism between different ownership, different market structure, using the profits sharing theory, distribution theory and bargaining theory. And on this basis, established the "monopoly profit sharing model" and "collective bargaining model, and make a mathematical derivation to the income distribution mechanism in stale-owned monopoly industry. Finally, we use the empirical analysis to simulate and validate our theoretical model.The fifth chapter is a more in-depth study on the problem of income distribution in state-owned monopoly industries. The high income in monopoly industries is not entirely unreasonable, but has its rational factors and irrational factors. We investigate each of them, and the rational factors and irrational factors are decomposed by empirical methods. At the same time, we explore internal recessive welfare, executive compensation incentive excessively high in-service public consumption, etc in the state-owned monopoly enterprise.The sixth chapter, this paper mainly investigates the political factors behind the high income of monopoly industries. We use pressure group theory of the new political economics to state the difficulty of the reform of monopoly industry from the pressure group perspective. We distinguish between the four interest groups, which may be related to the reform of monopoly industries:government regulation group, consumer interests group, monopoly group and potential competitors group. We proved that the monopoly group is a vested interests group, which will by means of their strong political influence and discourse power to hinder the reform.The seventh chapter, proposed the feasible path to change the current abnormally high income in state-owned monopoly—perfect monopoly state-owned monopoly industry bonus system. This chapter mainly elaborates the dividend theory in monopoly state-owned enterprises, the present dividend theory in domestic and overseas, the necessity and urgency of the dividend, as well as study to the effect of the bonus system. At the same time, in this chapter, we estimate the dividend ratio in some industries by a mathematical model, in order to Use the little to get the big.The eighth chapter is the main conclusion, and the prospect of future research.