On The Performance Of Function Of Resource Allocation On China's Stock Market

Within the theoretical framework of institutional economics, this dissertation dedicates to exploring the performance of the function of resource allocation(PFRA) on China's current stock market from the perspectives of empirical research and theoretical analysis. Combining prescriptive and descriptive research, quantitative and qualitative analysis, dynamic comparison and static description, the study starts from the establishment of market institutions and attempts at applying the theory of institution and evolution of institution into the analysis of the whole process of resource allocation, with the purpose of seeking reasonable explanations of the deficiencies of PFRA on China's stock market. The author first makes a theoretical analysis and outlines the functions of resource allocation on the stock market. Then an empirical research is carried out from the two levels of increment-sectors resource allocation and stock-sectors resource allocation, integrating the methods of data analysis and econometrics. He moves on to construct an analytical framework based on institutional economics and applies it into the theoretical elaboration on PFRA on China's stock market, including the interior mechanism and exterior characteristics of the deficiencies of institutional establishment and evolution of the stock market. On this theoretical basis, the author scrutinizes the behavior selection tendency of listed Chinese companies and common investors, as well as the impact of this tendency on PFRA on such a deficient stock market.As a whole, the present PFRA on China's stock market is poor. Numerous resources are misallocated and wasted; the function of resource allocation is severely distorted. The source lies in the deficiencies of institutional establishment and evolution of the stock market, especially "the three institutional conflicts" in the institutional evolution route and the exorbitant administrative intervention of the government to the stock market. Under the influence of various institutional deficiencies, the listed companies and investors are prone to select behaviors that go against market efficiency, and as a consequence, distort the market mechanism and restrict the fulfillment of the function of resource allocation. Therefore, the basic way to optimize PRFA of China's stock market is to transform from the mandatory mechanism with the government as the leading force to the institution with the market as the modulator. Meanwhile, targeted at the establishment of modern property right system, the reform of property rights should be deepened and the supervising system of stock market should be further improved.