Market - Oriented Reform Of China 's Electric Power Production Industry - From The Perspective Of Total Factor Productivity

This article studied the domestic industry of electricity generation from 1999 to 2007. It will calculate the change of TFP at that time in order to discuss the effect brought to power generation industry by system revolution and give some suggestions to the coming revolution.This article observes the market orient revolution of the power generation industry in the tentative stage and the deepening stage. The observation will focus on ownership change, the role played by government and so on from the foundation of PRC to nowadays, the 8-years data comes from the survey database of the chinese industrial enterprises, which is completed and comprehensive. The analysis method includes OLS, panel fixed effect model, Olley & Pakes method and Levinsohn & Petriny method to have a horizontal comparison. The analysis will also consider the difference between the tentative stage and the deepening stage to have a longitudinal comparison. The observation will distinguish between state-owned companies and individual companies, and among four child industry within the power generation industry. The final result is to get a clear understanding on the procedure, reason of TFP change after revolution of power system.According to the calculation of TFP of power generation industry and some facts,in the process of the two stage revolution, both the entire industry had benefit, no matter which different child industry the observation object is in or who controls the observation object. But the change of FTP was slow and stable, reflecting the revolution had not done too much to the industry. Besides, although the state-owned companies were after the individual companies, but the gap was narrower, which is the result of much slower growth in individual company affected by uncompleted revolution. The growth of the TFP of the hydropower industry and the thermal power industry was quite slow, but the TFP of the other energy power generation industries was quite volatile. Nuclear power generation industry’s TFP is largely influenced by politics. Other energy power generation industries, like the new energy power generation industries, had gone through cyclical downturn but recovered soon because of technology spread and more subsidies from government.This article combines facts and empirical studied, give the result that the market oriented revolution of power generation industry was not completed. Power selling is still in the hands of state monopoly, and the price is still being manipulated by government, which do much harm to the development of power generation industry. According to the above reasons, this article give some advices to every child industry on their development, which include the complete competition in the power selling industry and the power generation industry, and proper regulation in the power transmission and distribution industry.