Research On The Effect Of China's Marketization Degree On Inter-provincial Factor Mismatch

Since 2015,China's GDP growth rate has been below 7% for three consecutive years,and economic growth has entered the “new normal” stage.The continued steady growth of China's economy needs to accelerate the pace of reforms in terms of demand,supply,and structure.The key to this is supply-side reform.The mismatch of production factors is the key issue in this round of supply-side reforms.On the other hand,a large number of institutional economics studies have shown that marketization can improve the efficiency of economic operations.Then what is the relationship between marketization and the level of misalignment?In order to study the relationship between marketization and factor mismatch,this paper explores the effect of marketization on the level of inter-provincial factor mismatch based on regional perspectives.Through the review of literature on marketization and mismatch of elements,it has been found that the study of the relationship between marketization and factor mismatching from the perspective of the region has not yet been,and it further illustrates the research value of this article.On the basis of theoretical research,using predecessors' data and theoretical models,the degree of marketization and the mismatch of factors between various provinces and regions in China during 1997-2014 were calculated.The degree of marketization in the region was found to be positively related to the level of economic development.The degree of marketization in the eastern region was higher than that in the central region and higher than that in the west.Through the measurement of the level of mismatching of elements,it is found that the level of capital mismatches in each area is significantly lower than that of labor,and the level of mismatch between areas is not consistent,but the overall trend is downward.Further calculations have been made of changes in the output of various regions caused by factor mismatches.It has been found that in recent years,China's economic output gap caused by factor mismatch has gradually narrowed.Then,by constructing an econometric model of the level of marketization and factor mismatch,the instrumental variable method is used to empirically analyze the model.The empirical results show that the marketization process can reduce the mismatch of capital elements,but it will increase the mismatch of labor factors.In general,marketization can reduce the overall level of regional mismatches.The reason why marketization influences two factors in different directions is mainly related to the mobility of the factor itself.Marketization has a direct impact on the capital factor,while the labor factor has obstacles due to mobility.Marketization indirectly affects labor relative prices by affecting capital accumulation.,And then affect the level of labor mismatch.The above empirical results passed the robustness test and also proved the accuracy of the results.Based on the theoretical and empirical analysis results,this article has targeted relevant policy recommendations and believes that accelerating marketization reforms,coordinated development of regional economies,regulating and constraining government actions,and guiding the development of factor markets have a positive impact on China's current economic efficiency improvement.