Research On The Effect Of Relative Factor Prices Distortion On Industrial Structure Rationalization

The development of China’s factor market is lagging behind,especially the relative factors price distortion of labor and capital is still very prominent,which has aroused broad and deep attention from all walks of life.Under the effect of the distorted price signal,the labor and capital can not be effectively configured between the industries,thus restricting the development process of the industrial structure rationalization.It has caused great obstacles to the high quality development stage of China’s economy.Therefore,starting from the main characteristics of the new stage of China’s economic development,this paper first systematically combs the related literature of the factor distortion theory and industrial structure theory at home and abroad,and analyzes the current situation and causes of relative price distortion in China.Secondly,from the theoretical level,it analyzes the relative price distortion of the elements in an all-round way.This paper sums up the specific forms of direct and indirect effects of relative factor price distortion on the mechanism of the rationalization of industrial structure,and then estimates the relative price distortion of the elements in 30 provinces of China in1999-2015 by using the translog production function.Then empirically analyses the rationality of the relative price distortion of the factors to the industrial structure by constructing the system GMM model.Finally,on the basis of the conclusions,we put forward policy recommendations to improve the relative price distortion and promote the rationalization of industrial structure.The main contents of this paper are as follows:First,it analyzes the influence mechanism of factor relative price distortion on the industrial structure rationalization from the theoretical level.The results show that the relative price distortion will lead to overcapacity,uncoordinated development of industry and the transformation of employment structure,which directly affect the process of industrial structure rationalization.What’s more,it will destroy competition mechanism,restrain innovation and restrain demand,which indirectly influence the process of rationalization of industrial structure.Second,the calculation of the relative price distortion of elements.Based on the comparative analysis,we choose the translog production function to calculate the relative price distortion of 30 provinces dring 1999 to 2015 in China.The results show that whether the national level or the regional level,the relative price distortion of elements is very prominent.From 1999 to 2003,the relative price distortions showed the status of eastern region<western region<central region,but from 2004 to 2015 of the eastern region<western region<central region.From 1999 to 2015,the relative price distortion of the elements showed a downward trend at the national level.In the regional level,in addition to the small rise in Beijing and Hainan,the fluctuating in Xinjiang,most of the provinces’relative factor price distortion had declined.Third,we empirically analyze the impact of factor relative price distortion on the industrial structure rationalization.Based on the provincial panel data from 1999 to 2015,the system GMM method is used to analyze the regression analysis of the whole country and the eastern,central and western regions.The results show that the results of the national and eastern,central and western regions all show that the relative factors price distortion will obviously inhibit the development of industrial structure rationalization,which shows that the relative price distortion has a significant inhibition effect on the industrial structure rationalization.In addition,the relative price distortion of the economically developed eastern regions has the weakest effect on the industrial structure rationalization,the second in the western region and the most serious in the central region.