Government Competition, Market Competition And Coordinated Development Of Regional Economy

Since Reform and Opening Up, China’s regional economy has achieved rapid development. At the same time, the unbalanced and uncoordinated development of regional economy is increasingly highlighted. How to promote the coordinated development of regional economy, is a major strategic task of China’s economic and social development in the new period determined by China’s communist party 18 th congress. Among the 30 years, there are many various factors promoting and restricting the development of China’s regional economy, in which the local government competition and market competition, is not only an important power to promote the development of regional economy, also is the main reason that lead to regional uncoordinated development. So that how effectively to optimize and coordinate the "double competition" between areas, is a fundamental problem to achieve sustained and coordinated development of regional economy. In this background, concerning the special period of economic transition in our country, this article attempts to make analysis of coordinated development of regional economy in our country from the perspectives of the government and market competition. The main purpose of this paper is to reveal the effect mechanism of local government competition and market competition on the coordinated development of regional economy, emphatically put forward the mechanism and countermeasures optimizating area "dual competition" to promote the coordinated development of regional economy in our country, and provide theoretical support and reference for decision-making of implementing regional coordinated development in our country under the new norm, also add a new point of view for the development of regional economics and modern competition theory.Combining with the review analysis of related literature at home and abroad, basing on the definition of government competition, market competition and regional economic coordinated development, this article theoretically make analysis of the influence path and its regional heterogeneity of the government and market competition on regional economy coordination development, and explains the mutual restraint between government competition and market competition on their impact on regional economic coordinated development. After then on the theoretical framework of the "core——edge" model, this paper build a space regional model adding in family, enterprises and government departments to systemly simulate the effect path of the government and market competition on regional economy coordination development and its external restraint. And then in order to provide data support for the empirical test, this paper measure provincial "point to point" coordinated economic development level in our country, by using entropy value method from three aspects of regional economic ties, regional economic disparities and regional economic growth difference, and measure the government and market competition respectively based on the perspective of productive expenditure and non-state investment in fixed assets. At the same time, this paper make empirical analysis of the influence factors of the coordinated development of regional economy in our country form perspective of government and market using quantile regression estimation method and the single threshold panel data model, and discuss the relationship between the government and the market competition through the panel Granger causality test. Then this paper empirically test the effect path of government and market competition on regional economy coordination development and its regional differences and mutual restraint mechanism using system GMM estimation method. In addition, this article discusses the local government competition’s impact on regional economic coordinated development by cournot game model and empirical experience. Finally, based on the research results, this paper puts forward the policy recommendations optimizating the mechanism of government and the market competition to promote the coordinated development of regional economy.A moderate amount of government competition is beneficial to promote the coordinated development of regional economy, and excessive government competition is not conducive to the coordinated development of regional economy. The influence of government competition on the coordinated development of regional economy is the game result of both the positive and negative effects of government competition. The positive effects of government competition shows the structural configuration of production factors between regions under the action of the productive expenditure, economic development environment optimization, economic structural transfer, system innovation and optimization, etc. The negative effect of government competition shows industrial isomorphism, local protectionism, vicious competition and fiscal expenditure structure deviation caused by excessive competition between governments. On the influence path the positive effect of market competition make positively constraint function and its negative effect produce negative constraints; In terms of comprehensive effect, at present, the negative constraint effect of market competition is more significant.The bidirectional effect formed by the resources allocation of market competition makes the influence path of market competition on regional economic coordinated development. The short-term impact of market competition on regional economic coordinated development is negative, but its long-term effect is positive. The positive effect of market competition shows production factors’ "return flow" and "spillover" mechanism, the relative price equalization of factors and reasonable configuration of regional industrial structure, regional division of labor and regional comparative advantage’s fully play, etc. The negative effect of market competition shows the widening gap of regional marketization and market failure under the market competition mechanism, etc. On the influence path the positive effect of government competition make positively constraint function, and its negative effect produce negative constraints; In terms of comprehensive effect, at present, the negative constraint effect of government competition is more significant.The effect of government competition on the coordinated development of regional economy is even more significant in the absence of the efficiency of market mechanism; the effect of market competition on the coordinated development of regional economy is even more significant in the absence of the efficiency of government function.For the region as a comparison, in provinces having market advantage, the effect of government competition behavior with the productive expenditure as the main means on coordinated development of regional economy is relatively weak, while the role of market mechanisms for coordinated development of regional economy is relatively strong; in provinces not having market advantage, the effect of government competition behavior with the productive expenditure as the main means on coordinated development of regional economy is relatively strong, while the role of market mechanisms for coordinated development of regional economy is relatively weak.In addition, this paper also found that:(1)The government’s initiative is strong and the spontaneity of market is strong. The market competition is the granger reason of government competition, on the other hand is not true. With the deepening of market competition, the government competition revealed a u-shaped path.(2)The optimizing of market mechanism, such as marketization degree, the agglomeration of factors and regional economic comparative advantage, have a positive impact on regional economic coordinated development, and the influence of local protectionism on the coordinated development of regional economy is negative, the influence of urbanization on the coordinated development of regional economy shows the inverted U.(3)The effect of fiscal expenditure of Starter province and Coma province on the coordinated development of regional economy is difference. In terms of starter province, the optimization of the market mechanism weaken the government’postive intervention on the regional economic coordinated development; In terms of Coma province the degree of marketization and urbanization level of ascension can weaken the government’s negtive intervention on coordinated development of regional economy.According to the above research conclusion, this paper puts forward suggestions and countermeasures optimizing mechanism of government and market competition to promote the coordinated development of regional economy. In terms of reasonablely standarding government competition mechanism, promoting innovation of local government’s performance evaluation mechanism to expand the positive effects of government competition, combing system of laws and regulations to promote regional economic development on the system path, setting up economic coordinated agencies across regions to ensure the organization guarantee forinteraction between local government, optimizating fiscal expenditure structure of local government under the perspective of regional heterogeneity. In terms of promoting strategy of market competition, guiding the labor factor of different levels configuration in regions according to supply and demand using market mechanism, boosting the undertake of regional economic structure transformation basing on the market allocation of capital, promoting regional economic convergence by rational utilization of technology spillover effect and technology Coma advantages, narrowing the gap of marketization degree between regions to optimize resource allocation of market mechanism. In terms of the interactive of double competition, building "market leading, government regulation and control" mode of regional economic development, strengthening the benign interaction between regional government system supply and the market system evolving, deepening dynamic complementary between regional government policy and market mechanism, boosting complementary effect of government and market competition to improve the regional economic coordinated development.