Institutional Change And Regional Economic Growth

This paper aims to analyze the impact of institutional change on economicgrowth from the perspective of production efficiency. It discusses the waysinstitutional change affects economic growth and also analyzes the impact ofinstitutional differences on regional differences in economic growth.It analyzes the impact of institutional change on technical progress. And itintroduces institutional factor into the economic growth model by regarding the rateof technological progress as the function of institutional factor. Through analyzing themodel, it concludes that enterprise efficiency (including allocative efficiency andtechnical efficiency) is the intervening variable between institutional change andeconomic growth. And one of the causes why regional economy grows differentlymay be the differences in institutional quality.And it establishes a comparative index to measure institutional quality byanalyzing the features of Chinese institutional change and regional institutionaldifferences. It authenticates the above conclusions by using the panel data concernedChinese from2000to2011to analyze empirically. Firstly, through absolute analysismodel it finds that institutional quality would affect the rate of economic growth byimpacting the enterprise production efficiency. Secondly, variation analysis modelshows that institutional differences also affect the differences in economic growth byimpacting the differences in enterprise production efficiency.On the basis of theoretical analysis and empirical analysis, it finds thatinstitutional change would affect economic growth by impacting enterpriseproductivity, and the differences in institutional quality also affect regional differencesin economic growth by impacting the differences in enterprise productivity. So for thesake of reducing the regional gap of economic growth, it needs more attentions toconsider how to reducing the differences in institutional quality in China.