The Effect Of Government Intervention On Resource Misallocation Of Service Industry

The service industry plays an important role in the national economy,and its development level is one of the important indexes to measure the economic development of a country.At present,China's service industry productivity development is in the bottleneck period.Resource misallocation is an important reason for restricting the development of China's service industry productivity.Because of China's special institutional background,the impact of government intervention on micro-enterprises is common,this paper systematically studies the impact of government intervention on the misallocation.The government intervened in the microeconomics through financial subsidy,financial depression and adminstrative barrier.Government intervention changed the price of the factors faced by the enterprises,which aggravated the distortions of the factor market.This paper extends the Hsieh&Klenow model to the industry level.We measure the resource misallocation and apply it to the data of the listed companies in the service industry between 2005 to 2014.The results show that the labor force misallocation is more serious than the capital misallocation.The resource misallocation has not been improved.According to the 2014 data,the output gap caused by factors misallaction reaches up to 10%.Through the analysis of the government intervention,it is found that government intervention has significant heterogeneity in each sub-sector,which shows that there is industry bias in government intervention.On this basis,this paper constructs the panel data measurement model by using the panel data of 10 sub-sectors in the service industry from 2005 to 2014.The results show that the administrative barriers have a significant effects on capital misallocation and labor misallocation.Financial depression and financial subsidy have significant effects on capital misallocation.This means that government intervention often leads to excessive use of capital and labor elements.In addition,industry concentration,foreign investment and employment reset rate is also an important factor affecting the resources misallocation.Therefore,in order to eliminate resouce misallocation,the government should improve the financial subsidy system,reduce the bank credit intervention and administrative barrier,and play the decisive role of the market fully in allocating resource.