The Empirical Analysis Of Factor Price Distortions In China Industry

Industry is an important pillar of a country’s economic development, in the context ofglobalization of financial spread, Industry, as the main industrial entities increased emphasison the real economy, there is no prosperity of Industry, no development of the nationaleconomy. In order to promote the healthy and sustainable development of the industrialeconomy, it must be done in the factor market articles. The key point of factor market to findif there is no efficient factor price reasonable. If factor price distortions exist, it is impossibleto accomplish a factor of an efficient market.This paper aims to study the existence of price distortions in the industrial elementsmarket, if there is, then to what extent price distortions, how the price distortioncharacteristics is presented. We build the required data for estimating the industrial capitalstock and estimated the value of the capital stock of different years of industry firstly; TFPwas calculated in nest procedure, we used the Malmquist index method, and analyzed thebasic characteristics of TFP. On the analysis of the total factor productivity show that China’sindustrial productivity is mainly rely on technological progress, and suffers fro m improvingthe efficiency of technology; Price distortions existed in any form of production functionthrough the analysis of the factor price distortion.The factor price distortion are presented tostay close to equilibrium and the changing rule of the equilibrium. Price distortions andproductivity analysis shows that the three are very closely linked, the price distortion in a coreposition, solving the problem of price distortion is an effective way to improve productivity,and the price distortion mainly solved by constantly promoting market-oriented reform.Andthen,we analyzed the calculation process and the basic characteristics of the factor pricedistortions, discussed the relationship between the market price distortions and productivity.Then draw the basic path to eliminate price distortions on the analysis on the basis of pricedistortions further.