Empirical Study On Deadweight Loss Of State-owned Monopoly Sector In Our Country

ABSTRACT:Issue of SOE reform has been the difficulty of China’s economic reform. Nowadays, along with entering the strategic opportunities of transition into the economic system and upgrading the industrial structure, it becomes a hot topic that performance, positioning and other issues of state-owned enterprises caused by special factors due to their own monopoly of once again. Presently, study for the reform of SOEs’data is most use of industry-level to discuss the issues about market power of the monopoly and industrial efficiency in the manufacturing industry or one of. Focusing on secondary and tertiary industry state-owned monopolies, this paper is aimed to measure the loss of efficiency and welfare in state-owned monopolies after the strategic adjustment of state-owned monopolies by using the data of listed companies and the impact relationship between welfare loss and state-owned nature, market forces, technical efficiency loss and scale efficiency.To begin with, taking the relevant indicator data ranging from2007to2012of China Statistical Yearbook as a sample, this paper measured the degree of state control in related industries by utilizing comprehensive two-dimensional analysis method and the weighted measure. As a result,9high state controlling sectors have been extracted. Among these9sectors,2/3belongs to the second industry. They are namely tobacco industry, oil and gas exploration industry, electricity, heat production and supply industry, water production and supply industry, coal mining and washing industry and petroleum processing, coking and nuclear fuel processing industry. The rest of9are all the third industries including air transportation, postal and banking industries. Secondly, using data of listed company data of above industries, we estimate the level of technical efficiency of state-owned monopolies in the Malmquist-DEA model, calculate the levels of technical efficiency in recent7years by utilizing index algorithm and analyze the extent of yearly losses of the state-owned monopoly sector efficiency in all sectors. What’s more, based on Harberger model this paper calculates limits of social welfare loss in state-owned monopoly. Finally, we use quantitative research methods to make a analysis about the relationship between deadweight loss and nationalization proportion, the amount of loss of technical efficiency and scale efficiency.Conclusions of research:(1) State-owned monopolies in China mainly focused on resources, energy, infrastructure and local key industry and service sectors.(2) The welfare loss of state-owned monopolies during2006to2011and total social welfare loss proportion of GDP are all on the region (5.787%-7.114%).(3) The deadweight loss is positively correlated inversely associated with the state concentration, the amount of technical efficiency loss and scale efficiency, including state-owned concentration greater impact on net welfare losses. Therefore, a moderate decrease on the concentration of state-owned monopoly sector contributes to social welfare improvements.