The Impact Of Institutional Innovation To Shenyang Economic Zone’s Economic Development

For a long time, as for the research of economic growth, more scholars analyses theirpositive effect on economic growth from the angle of the factors of production. Until theemergence of new-system economic, represented by Coase, people get to know theimportant role of institutional factors on economic growth. Along with reform andopening up, China keeps deepening the reform of market economic system，which turn tothe socialist market economy gradually and the contribution of institutional innovationsto economic is growing prominence. But domestic related researches don’t linked theproblem of economic growth to institutional innovation closely, let long quantify thecontribution of institutional factors to economic growth by a specific technical means.Shenyang Economic Zone is located in the Northeast China old industrial base,economy has developed rapidly for decades after its foundation and the relevant systemconstruction has a bigger breakthrough, especially after implement the strategy ofRevitalizing the Old Industrial Base in Northeast China, which shows that study the effectof institutional innovation to the economic development of Shenyang economic zone is ofgreat realistic significance and necessity.This article analyses the important role of institutional factors on economic growthfrom two aspects of the theoretical analysis and empirical analysis. It regards Shenyangeconomic zone of the institutional innovation as the main vein and applies the relevanttheories and methods of institutional economics and econometrics，This article suggeststhat the output elasticity of institutional innovation is greater than the output elasticity oflabor input, the positive effects of institutional innovation to Shenyang Economic Zone isgreater than the positive effects of labor input, but less than capital investment.Content of this paper are arranged as following: the first chapter is introduction,which discussed the significance, background and research situation in China and abroadabout the topic. The second chapter summarizes the related theory of institutionalinnovation and economic development. The third chapter analysis the system innovation and economic development of Shenyang Economic Zone in theory from five aspects. Thefourth is the emphases of the whole article, which analysis the institutional innovation andeconomic development of Shenyang Economic Zone in empirical approach. First of all,this paper summarizes related institutional measurement, then selects five indicators oninstitutional innovation In reference to previous research, and then measure the weight ofeach index, synthetic institutional factors by using Principal component analysis. Then, thispaper improves the C-D production function, builds the generalized C-D productionfunction model by introducing institutional factors, Finally this paper analysis the effect ofinstitutional innovation to the economic development by using multi-regression analysis.The fifth chapter points out the problems of institutional innovation in the course ofpromoting economic development of Shenyang Economic zone. The sixth chapter putsforward the corresponding countermeasures. The seventh chapter gives the conclusions.Based on above research, this paper puts forward suggestions to speed up thepromotion of institutional innovation to the economic development of Shenyang EconomicZone finally. Firstly, speeding up the reform of property right system, encouraging diversesectors of the economy to develop, Secondly, improving the labor market mechanism,improve the social security system. Third, strengthening the exchanges and cooperationwith the coastal economic belt, raise the level of opening to the outside world. Fourth,speeding up market construction, improving the level of marketization. Fifth, handling therelationship between government and market, accelerating government transition.