China During The Transition Period Incentive Mechanism Study

Entrepreneur is the exponential and practitioner of market innovation, and the deciding factor of market process as well. Incentive problem is the core of economics study and the core of economy system reform. However, for a long time some problems were deep rooted, and it made our entrepreneur institution very expensive while entrepreneur very cheap. On the background of economy globalization and China's entry into WTO, the lack of entrepreneur incentive and the lag and distortion of incentive institution are more salient and have arised much attention. During the transition periond from traditional plan economy to socialism market-oriented economy, the problem of entrepreneur incentive should be solved, which will help restructure the micro-basis of market competition, to orient reform to market-oriented economy, and provide our country's transition and institution evolvement new power. The entrepreneur incentive problem is discussed in this paper so that beneficial apocalypse is offered to the establishment of effective entrepreneur incentive mechanism during our country's economy system transition period.The entrepreneur theory is discussed critically in the article. The analysis frame of "institution -mechanism-performance" of entrepreneur incentive problem is established after economics and management are combined organically under a "rational motive - preference continuum current" frame, and the idea of "entrepreneur incentive mechanism-corporate governance structure-institution" is offered based on the related theory studies. From the system angle, the entrepreneur incentive mechanism is divided into four sub-systems as following: material reward incentive, control right incentive, reputation incentive and market competitiveness incentive. The four sub-systems, which are combined with the institution analysis of entrepreneur incentive problem, are included into corporate governance frame, and at the same time, the corresponding policy suggestions are offered.