Empirical Research On The Impact Of Government Regulation On Regional Economic Development

Government regulation is an important part of economic behavior, and is an important means for the government intervention in the economy. Government regulation can promote or inhibit economic activity has been an issue of economics research.Government regulation is subject to government, regulatory actions and measures are made for the economic agents of market economy. It has great significance to the establishment of the corresponding business rules for operation of the market and the enterprise behavior, maintain proper order of market economy, improve the welfare of the whole society. But government regulation as a "latent variable" statistically significant, there was no direct measurement methods of operation. Only through some observations indexes or significant variables, can we describe the observations of the intensity of the government regulation. Synthesis of existing theoretical research, we propose two hypotheses about the effect of government regulation. Firstly, the government regulations have a negative effect on the development of economic; Secondly, the government regulations have a negative effect on the social development. The main research contents of this paper are followed:Therefore, based on the report of the World Bank Group, In this paper, we use IFC data on "standard enterprise" in China’s capital city to reflect the strength of government regulation. This data shown restrictions or constraints when entering the business field in terms of qualifications, costs, conditions and procedures. Using these data,this article constructs the observation index at the macro level of government regulation strength.Secondly, using the factor analysis method to give a comprehensive measure of government regulation strength for our country, and carry on the comparison, ranking; using the cluster analysis method to classify all regions of the country in accordance with the government regulation strength, we can see that the states Nanjing, Guangzhou with the weakest regulations, Changchun government regulation of the maximum intensity.Finally, a structural equation model which can deal with the relationship between latent variables is established. The structural equation modeling method is the integration of the regression analysis and factor analysis, with the advantages of the traditional model hasn’t. This paper uses structural equation modeling to verify and test the hypothesis proposed. Verify and test the effect of government regulation on economic performance and social development. It provides a suitable analysis tool for this article.Based on the the results of empirical studies on the relationship between government regulation and economic development in China, the paper summarizes the government regulation situation in china and proposed the following suggestions. First of all, reduce the economic regulation strength appropriately, break trade barriers, reduce barriers to entry in some industries.It is an important factor to ensure the economy of our country full of vitality. Secondly, adjusting the proportion of social regulation in government regulation, and raise the importance of social regulation.Finally, give full play to the role of government platform, relying on the government regulation to create a good economic platform. Through government regulation measures in legislation, supervision, publicity, public opinion guide mode, to ensure the good operation of the economic platform.