Research On The Mechanisms Of Factor Misallocation And Technical Efficiency

The development of manufacturing industry is an important indicator for a country to measuring the national competitiveness.Currently,China’s economic situation is exceptionally grim.In May 2014,the Chairman,Xi Jinping,put forward thar China was already in the period of "China’s New Normal",which meas China’s economy have bid farewell to the stage of developing rapidly,and is beginning to show a trend of stagnation or even declining.In order to solve excess manufacturing capacity,irrational factor structure and imbalance of supply and demand in China,at the 11th meeting of the central finance and economy leading group on Nov 10,President Xi Jinping stressed that China should strengthen structural reform of the supply front to increase the quality and efficiency of supply system and provide a growth impetus for sustainable economic development.Under such a background and environment,it is significance to recognize current situation the manvfacturing factory facing and analysising the problems existed in the manufacturing factory,which promote the upgrading of the structure of manufacturing factory.Then,as for the manufacturing factory,with the worst excess manufacturing capacity and factor market distortions,how to implement the structural reform of the supply-front?The effect of policy depends on the growth trend and constraints of the technology efficiency in manufacturing factory,and the reasons have an effect on technology efficiency are the key to make the the structural reform of the supply-front further.Therefore,this paper put this as a starting point,focus on the problem below:In order to make a balance of the economical structure,how to hold the relationship of factor misallocation and technological innovation?As an important indicator of the quality of the economic growth in a country or region’s industry,is it just like the government expected,the companies will be forced to improve the technical efficiency due to the rising of the factor prices?Is there any differences of this mechanism happened with different ownership,regions or industry?Focus on these issues,this paper will study the relationship of factor misallocation and technical efficiency,which the previous studies have never been involved in.At the same time,in order to ensure the rigor of the theoretical framework and the empirical analysis,first of all,we innovatively take translog production function instead of C-D production with a strong assumption to improve the HK model,then take advantage of the general equilibrium theory and Solow Growth Model to build a theoretical framework from static to dynamic,build relationship of factor misallocation and technical efficiency from the perspective of theory.Subsequently,measure and carry out comparative analysis with both different levels(sub-regional,sub-sector)and different methods(SFA model,Malmquist model),study the situation and development trend currently.At last,build a dynamic panel model with the micro-enterprise data,discuss the relationship of factory misallocation and technical efficiency,and show the conclusion and policy recommendations.Through the theoretical framework,we find that the technical efficiency and factor misallocations exist a negative correlation.It indicates the technical efficiency falls as the factor misallocation is serious.Imagely,when a manufacturing company found the excessive rise in prices of raw material increased the cost and led to unprofitable,it must reduce the usage of raw material,which also cut down the output,and indirectly reduce the efficiency of enterprise,make the profits currently decline.Then,with the dynamic panel model,which has the lags of factors misallocation,we realize the current mismatch of factors and technical efficiency does exists a negative impact,but the lags have a positive correlation with the current technical efficiency.The found we get not only confirms the conclusions of our theoretical framework,but also makes up the shortcomings the theoretical framework not mentioned.What’s more,it illustrates that when the factor misallocation is serious,the TE of the company will reduce first,but in order to ensure the elimination of profits and output losses,the enterprise will certainly strive to improve the technology and increase R&D investment up to reduce costs to offset the loss of output caused by mismatch factors,therefore,the introduction of new technologies,new processes,new equipment will process there is continuity and dynamic effects in the next issue brings improve and increase the output of technical efficiency,from the point of theoretical models and empirical research,this paper verified the improved HK model is reliability,rationality and rigor.In addition,the added ownership in model as a policy variable,show a significant differences of ownership in TE,and state-owned enterprises has a negative effect on TE,while others have positive effect on TE.It shows that since 2000,due to the old system and dependent on government,the state-owned enterprises exist many potential problems of development,such as overcapactity,irrational structure of factors,imbalance of supply-demand,etc,In the past,there are many references studies on these issues,highlighting of these issues continue to prevent TE from improving,which is the main reason for the government to start supply-front reforms.The pioneering work of this article is mainly reflected in:First,we innovatively take translog production function instead of C-D production with a strong assumption to improve the HK model,then take advantage of the general equilibrium theory and Solow Growth Model to build a theoretical framework from static to dynamic,show the negative relationship of factor misallocation and technical efficiency from the perspective of theory;Second,through the dynamic panel model confirms the correctness and reliability of the theoretical model,based on the combine of theoretical and empirical verified the current factor misallocation will reduce TE,and added that the preliminary elements of a mismatch will increase technical efficiency this delayed effect,to make up for the gaps in research in this field mechanism;third,pay attention to the robustness of the estimation results,when considering the effect of the mismatched elements of China’s manufacturing technical efficiency,using a variety of estimation methods and measurement methods,and careful selection of the end of the lag,and strengthen the model specification tests and stability tests to ensure robustness of the estimated coefficients and model.