Analysis And Solution On The Problem Of Resource Allocation Efficiency In China Stock Market

The original establishment intention of China stock market established is to raise funds for state-owned enterprises, of course the function of resource allocation was ignored.However,with the development of China stock market,a large number of potential problems was exposured. One of the most serious problem is the distortion of China stock market in resource allocation and inefficient application of market resources. Therefore, the resource allocation function of the stock market is gradually attached. In recent years, many scholars have studied the efficiency of resources allocation in China’s stock market, and found that the efficiency of resource allocation in China’s stock market was low.Based on China’s A-share market analysis, we found that the level of resource allocation in China’s stock market is actually lower compared with developed country. In view of this situation, this paper carries on the depth analysis, and finally proposes solution methods.First,using Jeffery Wurgler model to analysis the resource allocation efficiency in China A-share market from 2007 years to 2014 years,we found that from 2007 to 2014 ,China stock market efficiency present downward trend.compared with the other developed countries,there is a big gap in resource allocation efficiency.Then, analysing the problem about resource allocation efficiency in China’s stock market,we found that the problem of low efficiency is caused by some direct and indirect effects .And these factors can be summarized as the heterogeneous beliefs of investors, the agency costs and the value of enterprises. The result of multivariate linear regression model also indicates that investors heterogeneous beliefs and agency cost have reduced the resource allocation efficiency,while enterprise value has promoted the resource allocation efficiency.Among them, the biggest influence is investor heterogeneity beliefs.Finally, we designed a scheme to solve this problem:the first is to weaken the government administrative intervention, the second is to improve the market mechanism, the third is to strengthen the ability of investors. And then, we discussed the feasibility, rationality,applicability about this scheme. Although there are some risks and other problems in implementation, the scheme is essentially reasonable, which provides a reference for solving the problem of resource allocation efficiency in China stock market.