The Research Of Factor Price Distortion Acting On Technological Progress

As a result of the GDP competition,local government tends to control the main factors' prices,which deepens factor price distortion.How does factor price distortion affect the technological progress of micro-industrial enterprises? Whether it reveals different impacting characteristics due to the differences in corporate ownership and region the enterprise belongs to? Based on existing researches,this paper selects data from 1998 to 2007 in Chinese industrial enterprise database,using OLS,FE and 2SLS empirical analysis methods testing how factor price distortion acts on enterprises' technological progress from micro-enterprise perspective.This paper Expects this could provide some evidence to the effect of Chinese factor market distortion on technological progress and propose some appropriate policy recommendations.In the second chapter,the paper summarizes two mechanisms between factors price distortion and technological progress derived from technical innovation and technology spillover through literature review.After that,based on monopolistic competition framework,we have also deduced the mathematical model of factor price distortions and technological progress,which theoretically proves their relationship.Further,through the statistical analysis of the factor price distortions and technological progress,we have given and preliminary verified the following hypothesis that factor price distortion may exist inhibitory effects for enterprise technological progress,but to a certain extent,there may be heterogeneity among different enterprises ownership and different regions.In chapter five,panel regression results show that coefficient of factor price distortions acting on enterprise TFP is negative,and passed the 1% significance level,indicating that China's industrial enterprises are facing an inhibition of technological progress from factor price distortion.Furthermore,for the study of heterogeneity about factor price distortion affecting technological progress of industrial enterprises,we take sub-indicators,sub-enterprise ownership,sub-regional sample to make regression analysis.The results show that capital and labor factor price distortion exists significant inhibition on technology progress.Factor price distortion significantly inhibits technological progress of state-owned enterprises and private enterprises.But in the group of foreign enterprises,the factor price distortion only has a little inhibition effect on its technological progress.Factor price distortion in middle and west regions reveals high degree inhibition effect to technological progress,which is much bigger than the effect in the east region.At last,we show conclusions and prospect ofthis article.