"market Failures" And Government Subsidies Behavior

The strategic emerging industries well meet the demands of transforming the pattern of economic growth in China because they can simulate innovation,improve efficiency of resource utilization,and multiply the economic development.Moreover,under the current “strong manufacture country” background,the new generation of information technology industry has become the core strength in China's “new normal” environment.However,accompanying with the rapid development of the strategic emerging industry,excess capacity,resource allocation inefficiencies,coordination failures,and other market failures ensued.In addition,Government support which including a large amount of government subsidies still play a dominant role in domestic development of the strategic emerging industry.Therefore,based on this background,this paper investigated the relationship between government subsidies behavior and various kind of “market failures” in the progress of the industry development.According to the connotation of the market failures and industry development situation,this paper defined the industry “market failures” in the aspects of research and development(R&D)efficiency and production efficiency.Meanwhile,on the basis of the connotation of government subsidies behavior,this paper divided government subsidies behavior into two categories,the government direct subsidies behavior and government indirect subsidies behavior,and discussed their influence on the R&D efficiency “failure” and production efficiency “failure” separately.The analysis in this paper was from micro perspective to analyze the relationship between the industry“market failures” and government subsidies behavior using the data of listed companies in the new generation information technology industry.Besides,this paper used literature and empirical analysis methods.Followings are the research progress.Firstly,this paper Summarized the possible “market failures” that might appear in the progress of China's new generationinformation technology industry development and the manifestation of these “market failures” on the basis of the existing literatures and then proposes related assumes.Secondly,this paper used the DEA analysis method to analyze the input and output efficiency of the industry listed company and test the “market failures” in the development of strategic emerging industry to validate the related assumes.Thirdly,based on the government intervention theory,the characteristics of the new information technology industry,the government subsidies status description and the existing research results,the paper tried to search the evidence of the influence of the government subsidies behavior and proposes related assumes.Fourthly,the paper build a government subsidies behavior and “market failures” relationship model to deeply discuss the impact of the government subsidies on to industry “market failures” and defined the real properties of these “market failures”.And finally,based on the existing research results and the research conclusions in this paper,the paper made relevant policy recommendations.The empirical analysis of this paper obtained the following results:The conclusions of DEA analysis showed that the phenomenon of development inefficiencies and lack of efficiency about new generation of information technology industry existed at this stage.The results of regression analysis showed that there is a significant negative correlation between government subsidies behavior and R&D and capacity efficiency of new generation of information technology industry.And there are significant differences between different types of government subsidies behavior and R&D efficiency and capacity efficiency.Through the above research findings,in this paper,the redefinition of “market failure” phenomenon with the development process of new generation of information technology industry is actually a dual reflect about policy failure and market failure.