The Impact Of Government Intervention On Capital Misallocation

China's economic development mode is shifting to intensive economic growth of innovation drive from extensive growth of elements and investment scale drive,the promotion of total factor productivity(TFP)is essential for change in the mode of economic development,and the efficiency of capital allocation is the key to TFP.But lead to the serious capital misallocation,such as industrial products supply shortage,deficiency of effective demand,excess capacity problems.So reduce capital misallocation,improve the efficiency of capital allocation,promote economic growth is important to maintain the sustainable development.Thus,what are the main factors influencing capital misallocation?Show that the government has a strong intervention based on political promotion for the business operation,and it caused business serious capital misallocation.Therefore,a systemic discussion on the government intervention affecting capital misallocation has a far-reaching significant to maintain the continuation repaid and healthy growth of Chinese economy.In this paper,this research reviewed the theories of capital allocation,government intervention,and through the classification,sorting out and the loss of capital misallocation efficiency,and the factors affecting capital misallocation efficiency.Firstly,analyzes the current situation of China`s capital misallocation;secondly,the government intervention behavior are analyzed,and then analysis the theory of mechanism with the impact of government intervention on the capital misallocation.On the basis of theoretical analysis,using the improved Capital Misallocation Efficiency Model,which were put forward by Hsien and Klenow in 2009,taking as samples the industry level of Industrial Enterprises above the scale of data and calculated 35 industries in China,measured capital misallocation from 2001 to 2010.And then,according to the previous studies,analyzed the industry differences.At the end,the empirical study is conducted on the main factors that influence the capital misallocation.Through theoretical analysis and empirical test,this article finds that:(1)there are serious capital misallocation in China's industrial sectors,and it manifests capital congestion and capital scarcity,different sectors of the capital misallocation is different;(2)China's growth model is based on government-led,the government intervention have deepened the misallocation of capital,the scale of industry and evolvement of marketization have a significant impact on capital misallocation.As the industry scale grew and marketization improved,it can relieve capital misallocation.This research put forward to eliminate capital misallocation and improve the overall level of the China's industrial capital allocation efficiency:to accelerate the reform process of capital market;reduce credit intervention in the financial sector;improving the financial capital market mechanism,open the "invisible hand" on the micro economic intervention,as well as a "visible hand".