Research On Institutional Innovation Of China's Corporate Bonds Market

The New Institutional Economics is of particular significance to China's corporate bonds market development, since it always focuses on institutional background underlying economic progress. According to the viewpoint of the New Institutional Economics, corporate bonds market belongs to the domain of institution, which is indeed a system of corporate bonds publishing, trade regulation, conventional and organizational scheme. By providing this series of institutional and organizational scheme, it defines the behavioral scope of market principal party, and stimulates or restricts the market principal party conduct. Since China's economy is undergoing the institutional transient process by shifting from planned economy to market-oriented economy, there are a lot of external government-led institutional scheme, and the institution supply is lack and lagging, all of which inevitably results in series of problems in the corporate bonds market. Therefore, systematic analysis of the institutional innovation process from the perspective of the New Institutional Economics, will surely promote the smooth operation of corporate bonds market, and improve the principal party behavior, and will be not penetrative and extensive in explanation, but also be of great significance in practice.By analyzing theories, basic tools and basic methods of the New Institutional Economics, with combination of the present situation and features of China's corporate bond market, this paper proves the New Institutional Economics is applicable and profound in analyzing corporate bond market. Further, this paper establishes a complete theoretical frame and research system for institutional innovation of China's corporate bonds market.This paper studies institutional innovation system of corporate bonds market, based on the two fundamental principles of the New Institutional Economics (Transaction costs domain and property right theory), institutional transition and innovation theory, and nation theory. First, from the analysis of corporate bonds market by using transaction costs theory, this paper believes the managerial transaction plays dominant role in the China's corporate bond market in transitional period of the country's economic system, which eventually leads to high transaction cost. Also, according to the property right theory, SOEs in China do not really reserves the independent property right so that they are unable to select appropriate financing structure based on their own target function, cost and earnings. Meanwhile, the lagging governmental policies' control also acts as the institutionalrestriction for this market. Secondly, from the institutional perspective, this paper puts forward the micro-level-institutional innovation system of property rights and investors mix, the middle-level-institutional innovation system of transaction, and credit judge, and the macro governmental policies innovation. Thirdly, this paper designs the evaluation system for those exploring institutional innovation practice. Finally, it gives prediction and expectation for the institutional innovation in the country's corporate market.