Measuring Institutional Transaction Cost Of China's Region And Comparatively Analysis

The time cost of starting a business in Shanghai is 35 days,Hefei needed 42 days to open it.Why are they different in doing business environment and economic performance with a closely inter-regional.Why some regions economic developing so fast and others slowly.Different the literature from the perspective of capital investment to analyze the regional economic performance.This paper base in perspective of institution economics,believe in institutional transaction costs are main driving force for the business environment and economic performance.The level of institutional transaction costs have a different market index and business environment,shaping in difference economic performance of regional and enterprises.According to the theory of environment institutional change,The region has low institutional transaction costs implements a more open-right social order,and the middle region implements a relatively weak environment and high transaction cost areas have an restrict social access order.This paper try to answer the following questions about the objective:(1)What is the institutional transaction cost?(2)How high is the institutional transaction cost in China? Is it consistent with the two projects including China Doing Business Environment 2008 and China's Provincial Marketization Index Report? What is difference about two projects?(3)What is relationship with doing business and marketization?(4)Based on the current supply-side reform,“cost reduction” policy is reduct institutional transaction costs of china enterprises and industries.Nowadays,the theoretical and practical are consider that the cost of institutional higher than other countries.Nobody make it clear how high these problems it is.As an important tool for understanding differences of economic performance,need us to measure and comprehensively analyze the institutional transaction costs.Firstly,we define the institutional transaction costs is what.Secondly,measures the institutional transaction costs based on the definition and compare two mature works.Summarize the differences and commonalities about them.Based on this to build indicators and measure it.Thirdly,compare the difference between industry costs and use DID model analysis.Test reduction of institutional transaction costs after china carried out supply-side structural reform.Finally,use grounding theory to get the reduction countereasures.This paper draws the following conclusions.First,the paper clarifies that institutional transaction costs are unreasonable costs incurred by enterprises using government's institutional tools.Institutional tools include laws and regulations,enterprise-related fees,corporate entry control costs,and government-enterprise.They are all within the scope of it.From a macro perspective,institutional transaction costs refers to the various institutional barriers caused by the unreasonable relationship between the government and the market,such as industry monopoly costs and unreasonable taxes.From a microscopic perspective,rational people control the market economy behavior of enterprises according to relevant laws and regulations.People may increase administrative approval items when the legal system unreasonable.Institutional transaction costs has caused by government administrative approval.Highlight by the fact that there are too many projects in the process of administrative examination and approval,the procedures of the government in the management of enterprises more complex.Such as expenditures of government and business,and the entry into the rules of enterprises are all in this category.Secondly,on the concept of institutional transaction cost refers to the unreasonable costs incurred by enterprises using the lengthy institutional tools of the government.The index was constructed from the macro-microeconomic post-event performance.According to the China Statistical and other related data measure the institutional transaction cost index of 31 provinces in China.After the calculation,it was found that the index showed a downward trend.And the overall reduction of the institutional transaction cost index decreased from 8.41% in 1997 to 7.9% in 2014.From the perspective of sub-regions,the developed provinces in the eastern region have the lowest institutional transaction costs,the second weakest middle region and the Northeast region,index 7.55,8.41,8.63 respectively.This results consistent with the 2008 China Business Environment Report and the China Provincial Market Index Report.Also the region of high marketization and good business environment have low institutional cost index.Using panel threshold regression mode to test and find out the institutional transaction cost has a negative of marketization and the business environment.Only cost decreases,it will improve marketization and business environment.Thirdly,this paper takes the “cost reduction and shortage supplement” policy reform as the quasi-natural test.Uses the double difference model to analyze the policy for cost reduction of enterprises and industries.Choose 2015 as a time-critical point to study the difference between the policy response.Our study found that economic policy significantly affect the institutional transaction costs of enterprises reduction,especially competitive industries and private enterprises.The average value of processing group costs higher than control group is 0.163 before the policy reform.And average costs after the policy was higher than 0,022.It clarifying that the institutional transaction costs of private enterprises are generally higher than public-owned enterprises.Fourthly,expaline why a large difference between the regions and industry of institutional transaction cost.The reason is that most of the regions with higher institutional transaction cost carry out extractive institutions and limit access social order.The regions of lower institutional transaction costs use a inclusive institutions and open access social order.The type of this area economy more prosperous,have a perfect relationship between government and market,contains less administrative intervention and monopoly,enterprises are more free to enter and exit.