Research On Capital Allocation Efficiency In Northeastern China

China's implemented the high-speed economic growth with the world attention in the three decades after reform and opening up. However, the economic success has resulted in income polarization, although it makes people excited with the economic achievement, and this polarization does not only manifest different social strata, but also reflected the different endowments of regional natural resources and socio-economic foundation. The northeastern region - the most important industrial base in the early days of New China– is renowned for their "heavy industry base,", but in the period that our country achieves rapid economic development more than twenty years, their economic status has deteriorated. The Central Committee of CPC proposed the strategic decision of "revitalizing the northeast old industrial base," in 2003, which brought the best opportunity for development to the northeastern region since the reform and opening up.Since the implementation of the strategy of "Revitalize the northeast old industrial base", the Northeast of China has made gratifying achievements in the economic development, however, the Northeast did not improve industrial competitiveness significantly, it is still potential to be developed. Why does the Northeast enhance the industrial competitiveness under the preference policy quickly? This paper attempts to focus on capital allocation efficiency in order to study the Northeast the effectiveness of the financial markets, and further analysis of the effectiveness that the preferential economic policy enhances the competitiveness of the Northeast in the current capital allocation efficiency level. In this paper, the body of a total of three parts: First, literature review, combing the industrial competitiveness of the theoretical system, which provides a theoretical basis follow-up study of this paper; Second, the Northeast regional capital allocation efficiency analysis, the empirical research to Northeast of the capital allocation efficiency made quantitative conclusions that the efficiency of capital allocation of the northeastern region is low; Third, the impact that capital allocation efficiency of the northeastern region has on the industrial competitiveness, under the premise of the efficiency of capital allocation ,it is an analysis the effective that the inclined economic subsidies made to enhance industrial competitiveness and initiatives recommend policies to improve capital allocation efficiency of the northeastern region.Specifically, the paper can be summarized as follows:1. Carding a large number of literatures of the domestic and foreign scholars on the study of economic growth, it defined the study of industrial competitiveness in a number of perspectives.2. With an empirical model of Wurgler in capital allocation efficiency, of this article carried out regression analysis on the Chinese capital allocation efficiency of the Northeast region since the reform and opening. As an important indicator of the extent of financial markets development, the capital allocation efficiency means the ability of rational allocation of resources in a country (regional) market. The results of this analysis indicate that China's northeast region have a lower capital allocation efficiency relatively compared with the developed eastern regions. This means that capital efficiency in the north-east is low, and the same amount of capital in developed areas can achieve higher profits. At the cases of capital free movement of, capital will flee from the northeast to look for more profits in other areas.3. Set up the model to consider, the impact that preferential tax rates and economic policies such as financial subsidies for the development of the northeastern region have on industrial competitiveness in the cases of efficient allocation of capital. And the following conclusion was made: the functions are limited, which the fiscal policy made to develop the industrial competitiveness in the northeastern region and to achieve economic revitalization in the current lower capital allocation efficiency. 4. Give a further the policy recommendations to enhance the capital allocation efficiency of the northeastern region of. In general, it can be summarized as follows: greater investment and improvement in a market economy infrastructure construction, which includes efforts to reform and open up further, to accelerate the pace of institutional transformation ,to reduce the role and impact of the executive power has on the in the elements allocation, to lower transaction costs, to reduce business start-up and operating costs, to get rid of all the elements of mobility restrictions and barriers, to create a business environment for small and medium-sized investors ,to improve and adjust the main structure of the market as soon as possible ,to implement the property rights reform of state-owned enterprises, to clarify the interests of the main enterprises, to activate the substantial stock of assets, as well as providing legal protection and the necessary financial services to the main benefit gainers.At present, our country's financial efficiency of quantitative research by relevant scholars is still relatively limited, in the process of writing this paper, there are less research methods and relevant data available in our country. Because of the author's limited knowledge, as well as the lack of available literature data, the recognition on impact the efficiency of capital allocation has on enhancing the industrial competitiveness is not mature enough, as the policy proposals put forward are also barely satisfactory. The paper is believed that the study still makes a theoretical and practical contribution to "revitalizing the northeast old industrial base."...