A Study On The Effect Of The Reform Of Government Examination And Approval System On The Development Of China's Manufacturing Industry

The reform of the government examination and approval system can deal with the relationships between the government and the market,and is the key to release the vitality of the market.It is also an important starting point for reducing the institutional transaction cost and promoting the development of China's manufacturing industry.However,whether the reform of the government examination and approval system will really promote the development of Chinese manufacturing firms has not yet conclusive evidence,and the channels from the reform to the development of manufacturing firms has not yet been proved.In view of this,study the impact of government examination of the reform system on the development of China's manufacturing firms and explore the micro-impact mechanism behind it will be the focus of this paper.Based on the micro data of Chinese manufacturing firms from 2000 to 2007,this paper investigates the effect of government examination of the approval system on the manufacturing firm innovation?manufacturing firm TFP and new manufacturing firm location,by using Fixed Effect Model,Two-stage Least Squares methods and Negative Binomial Regression.The main conclusions are as follows:Firstly,based on the micro data of Chinese manufacturing firms from 2000 to 2007,by building two sector economic model including government,business and consumer,this paper estimate the impacts of the government examination of the reform system on the manufacturing firms' innovation output.The empirical results show that the reform of the administrative examination and approval system significantly improves the Chinese manufacturing firms' innovation output.At the same time,this paper also finds that the reform of government examination and approval system has heterogenous impacts on the manufacturing firms' innovation output:(1)The reform of the government examination and approval system show stronger poistive effect on the manufacturing firms' innovation output in the central and western region than the eastern region;(2)With the increase of the scale of firms,the effect of the reform on the innovation output of firms has been weakened.In addition,this paper applies PSM method to test the the channels from the reform to the manufacturing firms' innovation output,finds that the reform improves the manufacturing firms' innovation output by reducing the transaction costs of manufacturing firms.Secondly,based on the micro data of Chinese manufacturing firms from 2000 to2007,this paper estimate the impacts of the government examination of the reform system on the manufacturing firms' total factor productivity.The empirical results show that the reform of the government examination and approval system significantly improves the Chinese manufacturing firms' total factor productivity.At the same time,this paper also finds that the reform of government examination and approval system has heterogenous impacts on the manufacturing firms' total factor productivity:(1)The reform of the government examination and approval system show stronger poistive effect on the manufacturing firms' total factor productivity in the central and western region than the eastern region;(2)With the increase of the scale of firms,the effect of the reform on firms' total factor productivity has been weakened;(3)The reform of the government examination and approval system significantly improves the total factor productivity of private firms,but does not has a significant impact on state-owned enterprises and foreign-funded enterprises.In addition,this paper applies PSM method to test the the channels from the reform to the manufacturing firms' total factor productivity,finds that the reform improves the manufacturing firms' total factor productivity by reducing the transaction costs of manufacturing firms.Thirdly,this paper examines the impact of the reform of government examination and approval system on the layout of China's manufacturing industry from the perspective of the location of new enterprises.taking 286 prefecture-level cities as firms' choice sets,this paper applies Two-stage Least Squares and Two-step Begative BinomialRegression to estimate the impacts of the government examination of the reform system on the location of new manufacturing firm.The empirical results show that the reform of the government examination and approval system can increase the new manufacturing firms' birth.At the same time,this paper finds that the reform of government examination and approval system has heterogenous impacts on the location of manufacturing firms:(1)The reform of the government examination and approval system show more attraction to the location of the new firms in the central and western regions than the eastern region;(2)The reform of the government examination and approval system show more attraction to the location of the new domestic firms than new foreign firms;(3)The reform of the government examination and approval system shows no significant effect on the location of the state-owned firms,but it has a significant attraction to the location of the non-state firms.In addition,this paper applies PSM method to test the the channels from the reform to the location of new firms,finds that the reform increase the new manufacturing firms' birth by reducing the transaction costs of new manufacturing firms.Based on the above empirical conclusions,this paper mainly proposes policial recommendations to simplify and standardize the approval process,short the approval time to promote development of China's manufacturing,including using new technologies such as Internet and large data to improve the efficiency of the reform,to establish the supervision mechanism of the reform and to take anti-corruption policy.In view of the availability of objective data and the rational selection of index variables,this paper put forward some deficiencies in this study and the future prospects for further improvement.