Study On Industry Differences And Influencing Factors Of China's Capital Allocation Efficiency

Capital,as one of the motive forces and important sources of expanding reproduction,is an indispensable part of economic development.However,the promotion of capital to economic growth is not only reflected in the accumulation of capital,but also reflected in the improvement of capital allocation efficiency,which will have a more profound impact on economic growth.Benefiting from the rapid development over the past decades,China's economy has accumulated a lot of capital.Although this helps to alleviate the scarcity of total capital,China still faces the problems of capital allocation,like imbalance and low efficiency.Therefore,it is of great theoretical and practical significance to measure and evaluate China's overall capital allocation efficiency,to compare the industry differences of capital allocation efficiency,to explore the factors leading to such differences,and to analyze the influencing mechanism of these factors in order to improve China's capital allocation efficiency,consummate the function of financial markets and promote economic growth.Based on the capital allocation efficiency measurement model derived from Jeffrey Wurgler's(2000),this paper evaluated the overall level of China's capital allocation efficiency from 2001 to 2016 through econometric methods,using the relevant indicators of various industries in China.Subsequently,we made a comparative analysis of industry capital allocation efficiency,measured the intensity of impact of factors affecting the allocation efficiency and explored the mechanism how these factors realize their function.Finally,we hope it can provide valuable information for investment strategies and government's decisions.The main research works develop on the way as followed.1.On the basis of defining the concept of capital allocation efficiency clearly,this paper clarified the important significance of studying China's capital allocation efficiency,stated the main contents and key methods of this paper,compared the advantages and disadvantages between two different methods of measuring capital allocation efficiency,and summarized the relevant theories and literatures on capital allocation efficiency,2.Based on Wurgler's(2000)calculation model,we investigated the overall capital allocation efficiency of China from 2001 to 2016 using panel data.The measurement result shows that although the overall capital allocation efficiency of China has reached the average level,there is still a big gap compared with developed countries.Subsequently,by introducing the time variable into the basic calculation model,the dynamic change of capital allocation efficiency was obtained,from which the basic characteristics of capital allocation efficiency change in the process of China's economic development are grasped.These information provided some intuitive data which is good for solving how to optimize China's capital allocation.In addition,taking the individual fixed effect into account,we calculated the level of spontaneous investment of 35 industries in China,and found that the intensity of non-market support for each industry is significantly different.Non-market behavior has significantly strengthened support for the oil and gas extraction industry and the electronic equipment manufacturing industry than the textile and chemical fiber manufacturing industries.3.By introducing industry variables into the basic model of Wurgler(2000),we measured the capital allocation efficiencies of 35 industries in China.The results show that although most industries have positive of capital allocation efficiency,there is significant difference in capital allocation efficiency among different industries.The capital allocation efficiency of textile industry is as high as 1.265,while that of oil and energy related industries is only-0.009.On this basis,we chose industry's technical characteristic,market structure and degree of openness as the influencing factors to test the relationship between any of them and the efficiency of industry's capital allocation.Unlike previous studies that directly test the linear relationship between the two sides,this paper investigated the possible non-linear relationship between the two sides by constructing a threshold regression model.Empirical results show that technical characteristic,market structure and openness have significant threshold effect on capital allocation efficiency.Moreover,the technical characteristic and the degree of openness will significantly improve the efficiency of industry's capital allocation,if they reach a certain level.However,the industry must maintain a reasonable market structure in order to achieve the optimization of capital.