Hierarchical Capture In Trasitional Economy

This dissertation focuses on the analysis of hierarchical capture in the countries of transition. With analyzing the case of Chinese steel industry and building mathematical models, this dissertation points out that due to the competition between SOEs and local firms in economic market, the leaders of SOEs and local governments compete against each other for their own promotion in political market. However, the central government has its independent preference to the two kinds of output so that it will change its policies on the root if its preference changes.Chapter 2 and Chapter 3 are the bases of the dissertation. Chapter 2 is the summary of the steel industry and Chapter 3 is the introduction of the theory. The second chapter describes the history and characters of Chinese steel industry policies in recent 60 years. Firstly, it summarizes the general condition and the tendency of Chinese steel industry developing. Secondly, it states the change of policies in Chinese steel industry and sorted these. At last, besides introducing the developing of other countries'policies, such as U.S. A, Japan, Korea, Russian and India, it points out the characters and the problems of Chinese policies for foreshadowing following parties. Chapter 3 is the reviews of literatures. The chapter follows the process of developing of the theory of regulatory capture, from the happening, traditional points, new regulatory theory to the research for the transitional countries. Finally, it gives the suggestion of Chinese economic and political institution reforming.Besides; the review of entry-barry theory is based on the theory of interest groups and focuses on the industry aspect.There is elaborate theoretical analysis in Chapter 4 and Chapter 5. Chapter 4 begins to propose the theoretical idea of this dissertation, the theory of "hierarchical capture". This chapter is divided into three main sections such as the conceptual description, summary of characters and causes. Chapter 5 illustrates the mechanism of hierarchical capture with mathematical models. At first, this chapter proves firms which enter into marker through capture are efficient. Secondly, with "leader model" this chapter analyzes the cost relation if one of SOEs and local firms want to win in the economic market. Then, with the incentive theory, this chapter designs the restrictions of individual ration and incentive comparison to work out the choice sets of SOEs and local firms. At the end of this chapter, the analysis of the variable preference of central government proves the central government could not keep its commitment.Chapter 6 is the econometrical part of this dissertation. This chapter uses the relative data from 49 Chinese steel firms to measure their scale efficiency and Malmquist index. The results show that there is not any scale efficiency in Chinese steel industry and there is not the phenomena that "bigger is better" mentioned by policies. With the way of tobit model, the results indicate that the steel industry policies are useless for helping Chinese steel industry improve general efficiency, however, they just protect the SOEs partially. These results prove SOEs captured the central governmental policy institutes to carry out the policies which just benefit themselves.Chapter 7 is the summary of this dissertation. The first section of this chapter summarizes the points and important conclusions of the whole dissertation, furthermore, figures out the practicable deeper research directions and topics based on the weakness of this dissertation. The second section gives the practical suggestion of the political and economic reforming in the transitional countries.Keywords:Hierarchical Capture. Transition Country. Regulation. Steel Industry...