Research On The Impact Of Economic Growth Targets On Resource Misallocation

Resource misallocation has been a hot issue in recent years,both in academia and in society.Resource misallocation hinders the effective and rational allocation of resources,resulting in efficiency losses.China has a serious problem of resource misallocation,and studying China’s resource misallocation problem is of great significance for achieving high-quality economic development.At the same time,economic growth target management,as a governance tool with Chinese characteristics,has been continuously improved in practice.Based on the above background,this paper specifically studies the impact of local government’s economic growth target management on inter-regional resource misallocation.Firstly,this paper discusses the mechanism of how economic growth target management affects inter-regional resource misallocation.The various behaviors induced by economic growth target management have different impacts on inter-regional resource misallocation,including both positive and negative behaviors.On the positive side,this paper argues that economic growth target management can improve inter-regional resource misallocation by creating employment effects and reducing factor mobility costs through infrastructure construction.On the negative side,this paper argues that economic growth target management can also bring about market segmentation,factor market distortion and other behaviors that aggravate inter-regional resource misallocation.Secondly,this paper refers to the methods of relevant literature to measure and analyze the degree,nature and trend of inter-regional resource misallocation in China.The research results show that the degree of labor misallocation between regions in China has been improving in the past twenty years,while the degree of capital misallocation has first decreased and then increased.The misallocation situation within sub-regions is relatively consistent,such as the eastern region with a higher level of economic development almost shows a lack of capital and labor allocation,and the western region with a lower level of economic development shows an excess of capital and labor allocation.Based on the estimation results of the two-way and interactive fixed effects model of panel data,it is found that the local government’s economic growth target management does improve the degree of inter-regional labor misallocation,but has no significant impact on the degree of inter-regional capital misallocation.Finally,this paper further discusses the benchmark regression results.For the possible endogeneity problem of the benchmark regression results,this paper contrasts the source of endogeneity with the research of this paper,and finds that the endogeneity problem may be caused by omitted variables and mutual causality.In order to obtain the causal relationship between the two,this paper chooses to use the instrumental variable method for estimation.After demonstrating the validity of the instrumental variable,the instrumental variable estimation is performed,and the results are still consistent with the benchmark regression,that is,economic growth target management significantly improves labor misallocation,while the impact on capital misallocation is not significant.After dealing with outliers and changing the measurement method of the dependent variable,empirical research shows that the research conclusion of this paper is robust.Based on the analysis of the impact mechanism,this paper studies the heterogeneity of this impact from different perspectives.This paper finds that the impact of economic growth target management on labor misallocation is more significant in regions close to ports,regions with more inland waterway mileage,and after the global financial crisis.Based on the theoretical and empirical analysis,the research results put forward the following policy suggestions on how to better play the positive role of economic growth target management on inter-regional resource allocation: Firstly,pay attention to the linkage between economic growth target management and employment creation effect.Employment is the biggest livelihood issue,and all regions should combine their own actual situation,organically combine economic growth target realization and employment growth,and achieve a benign interaction between them.This means that economic growth target management should not only strive to ensure the achievement of quantity,but also achieve quality improvement.Secondly,deal with the relationship between economic growth target management and infrastructure construction.Infrastructure construction,as an important means for local governments to achieve economic growth targets,helps to increase aggregate demand in the short term and improve resource allocation efficiency and potential production capacity in the spatial scope in the long term.But excessive reliance on infrastructure construction to achieve economic growth targets will also lead to path dependence and generate various new problems.Therefore,infrastructure construction must be tailored to local conditions,rationally planned,and strive to achieve supply-demand balance.Finally,optimize the institutional environment for economic growth target management as a governance tool to play an effective role.Eliminate the mechanism barriers to the healthy operation of the labor market and reduce the institutional costs of labor mobility,especially cross-regional mobility.Eliminate various unnecessary market entry and exit barriers,especially the local protection policies set by various regions that harm their neighbors,accelerate the adjustment and combination of regional markets,and clear obstacles for cross-regional free flow of capital.