An Analysis And Realization Of Efficiency Related Scale Model In Economic Zones

After the reform and opening-up of China, local governments of higher-level,larger-scale economic zones can obtain relatively more economic resources and policy support in the practice of regional economy development. Hence, the expansion in the scale of economic zones has become a significant feature of the local government economic zone strategy accordingly. However, the unlimited expansion of economic zones in operation brings about the higher economic aggregate which inevitably has many negative impacts such as overconsumption of natural resources, the ecological environment destruction,imbalanced regional developments which are constantly devouring the economic aggregate growth brought about by economic scale expansion gradually. Therefore, the positive effects of economic regionalization have not only been drained, but also these negative impacts have stored up huge problems for the future of economic reform. The initial signs of recession in the northeast of China from 2015 has made us realized that we should approve the economic philosophy of "the most efficient" rather than "the maximal economic aggregate". Then, is there a "most effective balanced scale" in the economic scale in operation? What are the key influencing factors? How to improve these influencing factors to expand the scale of operation most effectively in the economic zones? Due attention should be given to the above questions from the academia.To discuss the efficiency and scale of economic zones with care and precision, the chapter 2 provides a clarification of the logic of economic zones development by combing the literature of forerunners to lay a foundation for the further probe into the determinant of efficiency and scale in the economic zones. This paper argues that the essence of economic regionalization is to reconstruct the production factors structure in the regions aiming at improving the phenomenon of "factors conjestion" in the previous structure and promoting the factor allocation efficiency. On the other hand, the labor division is the basic activity in production factors reconstruction. Hence, the dissertation will specify the economic zone formation mechanism into three problems,namely,"labor division based on specification","the network of labor division units " and "the organic combination issue in the network of labor division units". The "labor division based on specification'' is the basic analytic unit in the problem analysis. The premise to realize "the efficiency" of the economic zone in operation is to realize "the efficiency" of the "labor division based on specification" in the zones. The chapter 4 constructs the model of "scale determining model based on the efficiency of labor division in the economic zones. To make the model easy to understand,the dissertation adopts the Ricardian model with characteristic of the two-person production system as the research object. In the original Ricardian model, the hypothesis assumes when analyzing the exogenous comparative advantage, the transaction cost will be zero. The original hypothesis is changed in this dissertation, because transaction cost can not be zero in any economic behavior in actual economical operation of the economic zone. To increase the matching of the model with the reality, this dissertation gives the model a dilemma between transaction cost and the economic utility of labor division. After the mathematical derivation of model and empirical test of annual economic data by Shanghai Pudong New Zone, three findings are listed in the dissertation. Firstly, on the given technology platform, due to the conflicts between the labor division expansion and transaction cost restriction, the efficient scale of labor division in the economic zones does exist. Secondly, since different technical levels correspond to different scales of balanced labor division, the irrational expansion of labor division scale will result in the fact that costly transaction cost will cat up the advantages brought about by the labor division, which brings about the decline of net production capacity to decrease the welfare level of workers and the total utility level in the economic zones. Therefore, technology progress is the basic power to expand the efficiency of labor division scale in the economic zones. To promote the technology progress is the primary job in the economic zone operation. Thirdly, in practice, people are prone to the larger balanced labor division scale, for one production system with larger balanced labor division scale means higher total utility level in the system which means that the producers in the labor division of the system will obtain higher welfare levels.The scale expansion in the economic regionalization activities in practice deviates from the model conclusion in the chapter four, which means there are some untapped reasonable explanations. To dig the reasons behind the deviations, the chapter five is designed to study"government-enterprise behavior" to obtain the reasonable explanations. The objectives of enterprise behaviors are relatively simple with the aim of maximizing the profits while the objectives of government behavior are relatively complicated. After the combing of the government administration objectives, the author tentatively plans to set the four administrative objectives including "maximization of social productivity","maximization of social welfare","maximization of consumer surplus" and "maximization of fiscal revenue"as the research target. Based on these four administration objectives, a government-enterprise game model is built. The scale is optimized in the economic zones by the strategy of adjusting "tax",“ land-transferring fees" and “ government special funds investment" in different conditions. There are several findings after analyzing game theory based on the different administrative objectives. The first finding is that if the government attaches more importance to the economic growth in the economic zones, the government will not invest special fund , provides subsidies for enterprises, or offer other funds support in other forms to make sure the enterprises in the zones to realize the survival of the fittest fairly. If the government regard the welfare of the citizens of the zones as more important,the government will invest special funds or offer other funds to the profitable enterprises to help these enterprises strengthen and expand further. The second finding is that among the keys to the game based on the four administrative objectives, the key to the game based on"maximization of revenue" is the most stable. As long as there is no sharp change irrationally in the market, the optimal scale in the economic zones is determined by the natural resources endowment structure and capacity of technology progress when the government set the" nmaximization of fiscal revenue" as the administrative objective. Therefore, the government should not implant more political objectives into the market-driving operation system.Government should not become the major factor causing sharp change in market.With comprehensive analysis of two theoretical models, it is found that the face" the government is wandering around a plurality of administrative objectives" in reality can be responsible for the question in some degree why the present economic regionalization practice deviates from the theory. To solve the problem of deviation, the characteristics of deviation between practice and theory should be clarified and reasons behind should be analyzed. The characteristics of practice and theory deviation can be displayed in the following aspects. The first aspect is that comparing the economic regionalization activities in reality led by the local governments and by theoretical modeling requirement, the former has shown the irrational overflow of "expansion" in the scale decision-making. The second aspect is that the economic regionalization led by the local governments has too strong purposes and prominent feature of seeking quick success and instant benefits so that the objectives and purposes of economic regionalization are mingled with too many non-economic growth factors. Three explanations account for the practice and theory deviation. Firstly, the complicated administrative objectives of local governments lack the mutual check and balance among powers, which results in the reality that many administrative objectives can not be precisely executed. Secondly, The index of the government performance evaluation system leads to the increasing upgrading of economic regionalization expansion led by local government. Thirdly, in the decision-making process of economic regionalization, the subjective initiative of the government is overemphasized.According to the specific reasons mentioned above, it is suggested that the government should strengthen the scientific nature in "economic regionalization goal setting'',"decision-making process of economic regionalization" and "decision-making evaluation of economic regionalization" and fulfill effectively their functions in terms of decision-making,which is the emphasis in the economic regionalization setting stage. However, after the formal operation in the economic zones, work behavior of the government is mainly concentrated in the right to perform government functions, implement government's financial behavior scientifically and efficiently, take the whole situation into account to improve the progress of science and technology within the jurisdiction, which are the main direction of government behavior in economic zone operation stage.The general ideas of the above suggestions mainly focus on the government who should respect the objective law of economic regionalization and reduce subjective preference. The development of economic zone's scale should have the inherent law. In order to achieve the effective expansion of the economic zone to enhance the economic power and welfare level of residents within the jurisdiction, the government should "promote the economic regional technical progress ability" and "to reduce the transaction cost of economic activities" double efforts in accordance with the natural resources endowment structure. Nevertheless, the premise of the double effort is enough respect for the "market", reducing the weight of the government's own preferences in the economic regionalization decision-making system. It is suggested that the government should fulfill their functions of "serving market","serving the economy development",reduce administrative intervention on economic development.Meanwhile, it is suggested that the government should clarify and refine the functions of the government and avoid the dilemma between "wanting to do this and wanting to do that" but nothing good.