Research On The Impact Of Intensified-Utilization Oriented Government Intervention On Regional Productivity

In recent years,with the increasing scarcity of resource needed for economic development and the improved ability of local governments to assess productivity of firms supported by modern information technology,the intensified-utilization oriented government intervention represented by the Picking Productivity-Winners Policy has received more and more attention from local governments.Intuitively,the intensified-utilization oriented government intervention will optimize the allocation of factors in the region,thereby increasing regional productivity.However,as a way for local governments to intervene in the market with a Visible Hand,the implementation of the intensified-utilization oriented government intervention may bring about undesirable economic results and decrease regional economic performance.While local governments at all levels are actively taking such the intervention that deeply involved in the process of factor allocation to promote high-quality economic development,what impact will the Intensified-Utilization Oriented Intervention have on regional productivity?whether there may be an inhibitory effect,and what is the specific mechanism of such kind of government intervention?These important questions have remained unanswered.Therefore,this dissertation analyzes the mechanism of intensified-utilization oriented government intervention affecting regional productivity from both theoretically and empirically,trying to provide the necessary theoretical basis and empirical evidence for the improvement of the intervention.This dissertation includes the following four parts:Firstly,this dissertation analyzes economic features of the intervention and identifies its pathes to affect regional productivity.Through a systematic review of more than 150 policy documents in 8 provinces including Zhejiang,Jiangsu,Shandong and so on,we find that the current intensive-oriented government intervention implemented by local governments have the economic features of productivity-oriented principals,embedded compulsory certification mechanism,and differentiated factor using costs for different firms.By analyzing the decisionmaking behaviors of different firms under influence of the intervention,this article clarifies two pathes in which the intervention affects regional productivity:one is factor allocation and the other one is innovation incentive.These fundmental works provide the necessary realistic basis for the construction of the theoretical model later.Secondly,under the framework of monopoly competition with heterogeneous firms,this dissertation constructs theoretical model of factor allocation and innovation incentive to investigate the affecting mechanisms of the intervention on regional productivity from two different perspectives:static and dynamic.In the static model,we assume that the firm productivity remains constant during its life time.By comparing market equilibriums before and after the introduction of the intervention,three effects of the intervention on regional productivity from the perspective of factor allocation are identified:the impairing effect of industrial collaboration to decrease regional productivity,the optimization effect of input structure to increase regional productivity,and the reconfiguration effect of productive factor to increase regional productivity.In the dynamic model that assumes that firm productivity dynamically changes with innovation inputs and regions can be linked through trade,we find that intervention can increase the innovation incentives of enterprises in the regions where the policies are implemented,thereby increasing regional productivity,but at the same time,policies will also crowd out innovation incentives in other regions where the intervention has not been implemented.The intervention has negative impact on the regional productivity of these regions and has negative externalities.Thirdly,we conduct empirical study on the affecting mechanism of the intervention obtained from the theoretical research on the regional productivity using the panel data at county level in Zhejiang Province from 2004 to 2017.The research found that:(1)the intervention decreases regional productivity.In counties with higher industrial technological complexity,the negative impact of policies on regional productivity is more significant;(2)the impairing effect of industrial collaboration of the intervention has normally exerted its ability to reduce regional productivity.Both the optimization effect of input structure and the reconfiguration effect of productive factor that can increase regional productivity becomes invalid.The intervention improves the innovation incentives of firms in the implementation policy area;(3)The intervention decreases regional productivity of counties without implementation of the intervention,which proves that the existence of negative externalities.Finally,we draw the conclusion that theoretically the intensive-oriented government intervention has the potential to increase regional productivity,but due to the operating environment in the transition of China and infaust implementation of the intervention,positive effects of the intervention cannot be exerted,while the negative impact is magnified in reality.This dissertation proposes four policy recommendations:(1)Building and improving a factor trading platform to support functioning of the intervention,(2)Formulating a comprehensive evaluation system based on localities and industries,(3)Correcting firms' short-term behavioral tendencies,and(4)Implementing coordination on policy making in neighboring counties to prevent negative externality of the intervention.The main innovations of this dissertation are as follows:Firstly,it is the dissertation to focus on the intensified-utilization oriented government intervention implemented by some local government in the new era that local goverments can precisely asess productivity of firms then manipulate cost of factor for firms.This dissertation comprehensively examine its affecting mechanism on regional productivity from two perspectives:factor allocation and innovation incentive.Research on this mechanism makes up for the lack of systematic research on intensive government intervention in the current literature;Secondly,we introduce the uncertainty of innovation and inter-regional trade decision-making of firms to the theoretical model,which enables the model to improve insufficient ability of the existing theoretical models to portray real economic world and a new perspective to study the impact of government intervention on regional productivity from externality.Thirdly,this dissertation conducts first empirical test on the affecting mechanisms of the intensified-utilization oriented government intervention on regional productivity and find the possible explanations for its negative impact on regional productivity,which provides key empirical evidence for the design and implementation of policies related.