Impact Of Factor-Market Distortion On Ownership Structure

The development of factor market has been lagging behind that of commodity market since the reform and opening. Production factors have distorted chronically. Especially when the financial crisis sweeping the world in2008, the responses to the financial crisis of enterprises with different ownership structures in China were poles apart. Large state-owned enterprises sprung up a massive wave of mergers and acquisitions, while mid-small enterprises went batched-like bankrupt due to the credit crisis eruption in Wenzhou. Meanwhile, a debate about that "State advances, while the private sector retreats" has lasted for some time.As stated above, this paper establishes a relationship between factor-market distortion and corporate ownership, and emphatically analyzes the influence of capital factors and labor force factors on corporate ownership. Initially, competition models of enterprises of different ownerships are established on the background of factor distortion. In addition, conclusions are drawn by analyzing the factor distortion of different ownerships in China:(1) Private enterprises have a competition advantage when their production cost takes a stand-out advantage;(2) State-owned enterprises have a competition advantage when their financing cost takes a stand-out advantage;(3) State-owned enterprises have an obvious competition advantage when the phenomenon of "credit rationing" exists.Based on the conclusions above, firstly, production function approach is used to measure and calculate the factor distortion degrees of27trades distributing in31regions in2009. The result demonstrates that the enterprises of various industries in China all have different distortion degrees of capital factors and labor force factors, and the distortion degree of the former is greater than that of the latter. Then empirical analysis of the influence on corporate ownership of factor price distortion degree is carried out based on the measuring results. The consequence shows that distortion degrees of capital factors and labor force factors have a negative correlation with the proportion that state-owned capital accounts for enterprise paid-in capital individually. Further analysis and explanation of this consequence illustrates:The negative correlation of capital factors distortion and the proportion of state-owned capital is caused by the number distortion of capital factors; and the negative correlation of labor force factors distortion and the proportion of state-owned capital is caused by the price distortion of labor force factor. In view of the conclusions, some corresponding policy recommendations are suggested in this paper.