| This paper focuses on the stock-issuing system in China, which is analyzed in the light of dealing with market failure and improving the efficiency of resources allocation. The Approval System and the Checking System are compared and contrasted. The conclusion is that the Checking System is better than the Approval System. In addition, some suggestions are made to enhance the efficiency of the Checking System.The paper has three chapters. In the first chapter, the general situation of the stock-issuing system is analyzed. The objective of a stock issuing system is to correct market failure and guarantee the efficiency of resources allocation. The criteria for assessing the efficiency are summarized in the light of the detailed analysis in the contents, nature and mechanism of the stock-issuing system .The second chapter deals with the respective effects on resources allocation caused by the two systems, namely the Approval System and the Checking System. The resource-allocation functions of the two systems are analyzed and contrasted in three major aspects, the internal allocation of the first level market, the resources allocation between the tangible economic sectors and the intangible economic sectors, and that between rent-seeking activities and profit seeking activities. Moreover, a chess model is established to analyze the policy constraints on the activities of the issuing parties in the context of information dissymmetry. The conclusion is that the Checking System is better than the Approval System.The third chapter focuses on the ways to improve the efficiency of the Checking system. First, the factors, which cripple the improvement of the efficiency, are related and analyzed from the points of main actors of the market, such as the issuers, the intermediary agencies, and the investors. Then, in order to ensure the efficiency of the Checking System, the con-cerning suggestions are made for the major market actors to adapt to the environment under the new system. |
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