The Impact Of Factor-market Ownership Distortion On Manufacturing Industry Productivity

Since 1978, Double-track price of product-market has been called off step by step. Up to now, product-market has basically been competitive and unified. By contrast, factor-market’s reform is lagging behind. Factor market is intersected seriously. Scholars showed that in China there exists severe distortion in factor-market, and the degree of factor-market distortion is different in the ownership, region, industry and factor.As stated above, this paper establishes a relationship between factor-market ownership distortion and manufacturing industry productivity. Based on China Industry Business Performance Data of 1999-2009, focusing on factor-market ownership distortion, this paper analyzes the impact of factor market ownership distortion on manufacturing industry productivity dynamically. The results are as follows:(1) The region-level analysis shows that the TFP loss caused by factor market ownership distortion is 10%-20%. The value of industry-level analysis is 2%-27%. (2) The extent of factor price distortion in the ownership is worse than that across the ownership. (3) The TFP loss of labor is bigger than that of capital, that is, the extent of capital price distortion is worse than that of labor. (4) During the study period, the TFP loss from the east, the middle and the west shows a down trending generally. Whether caused by capital distortion or labor distortion, The TFP loss of high technology industries is bigger than traditional labor-intensive industries. In view of the conclusions, this article made further analysis and explanation. According to the results of the study, some corresponding policy recommendations are suggested in this paper.