A Study Of The Location Choice Of Enterprise Based On The View Of Government Regulation

Government regulation is an indispensable institutional arrangement in the modern market economy, the OECD believes that government regulation, fiscal policy and monetary policy play important role in assuring economy running stably and welfare distributing well. In general, whether the government regulation should be taken depends on the industry enterprise belongs in. The natural monopoly industries and the industry there is partial information is a key concern of government regulation. The researches that regard the enterprise spatial monopoly as a way of monopoly and research the necessity and the feasibility of government regulation are less.This thesis attempts to explore the necessity and the feasibility of government regulation. The theoretical logic of this thesis is that government regulation may influence the location choice of enterprise. The change of location choice may influence the total social surplus by reducing spatial monopoly of enterprise.The focus is on spatial monopoly of enterprise. This thesis discussed the necessity and the feasibility of government regulation promoting the total social surplus. On the premise of spatial monopoly, the theoretical analysis which based on hotelling model proves the necessity of government regulation. The government regulation which based on government subsidy is economic efficiency(Karldor-Hicks Principle). The government regulation could inhibit the regulatory capturing and improve the distributive justice.