The Impact Of Institutional Transaction Cost On The Entry And Investment Efficiency Of Private Enterprises In China

Institutional transaction cost occupies an important position in the operating costs of enterprises.As the government attaches more importance to reducing the operating costs of enterprises,reducing the institutional transaction cost has become the top priority in reducing the operating costs of enterprises.Institutional transaction cost refer to the cost incurred by enterprises in the process of complying with various government systems,regulations and policies,such as the costs to be paid for complying with the government administrative examination and approval system,tax system and financing system,etc.Under the puzzle of institutional transaction cost,the survival and development of most enterprises in our country are greatly restricted,especially private enterprises.On the one hand,before entering the new market,private enterprises need to accept strict and complicated administrative examination and approval on the premise of satisfying various entry conditions,making it difficult for private enterprises to enter.On the other hand,after private enterprises enter the market,the problems of heavy tax burden and high financing cost often have adverse effects on the investment decisions of private enterprises,resulting in low investment efficiency of private enterprises and hindering the development of enterprises.Based on this background,from the perspective of institutional transaction cost,this paper theoretically analyzes and empirically tests how institutional transaction cost affect the entry and investment efficiency of China’s private enterprises,verifies the importance of reducing institutional transaction costs to the development of private enterprises,and finally draws a conclusion and puts forward corresponding suggestions according to the research conclusion.In order to analyze the impact of institutional transaction cost on the entry of private enterprises in China,this paper selects the index of administrative intervention and government integrity efficiency,the index of enterprises’ tax burden,the index of financial services and financing costs as the reverse measurement of institutional transaction cost,selects the growth rate of newly registered private enterprises as the measurement of entry of private enterprises,then collects the micro-data of number of newly registered private enterprises in 51 cities of China in 2016,and establishes an empirical test model finally.The results show that there is a positive influence between the index of administrative intervention and government integrity efficiency and the growth rate of newly registered private enterprises,and the result is significant.The tax burden index of enterprises also has a positive impact on the growth rate of newly registered private enterprises,and the result is significant.The index of financial services and financing cost has no significant impact on the growth rate of newly registered private enterprises.This implies that the lower the tax burden for enterprises and the less government administrative intervention,the better the entry of private enterprises.In order to analyze the impact of institutional transaction cost on the investment efficiency of private enterprises in China,this paper selects the same index as above to measure institutional transaction cost,and selects the inefficient investment as a reverse index to measure the investment efficiency of private enterprises in China,which is calculated from the expected investment model,then collects data of 869 private listed companies in China in 2016 for cross-sectional analysis.The results show that the index of administrative intervention and the government integrity efficiency has no significant impact on the inefficient investment of private enterprises in China.The index of tax burden has a negative impact on the inefficient investment of private enterprises in China,but it is not significant.The index of financial services and financing cost has a negative impact on the inefficient investment of private enterprises in China,and the result is significant.This implies that the main factor affecting the investment efficiency of private enterprises in China is financing constraints.Finally,according to above research results,this paper draws the following conclusions: the lower the institutional transaction cost of government administrative intervention,the more entry of private enterprises in China;the lower the institutional transaction costs in financial services and financing cost,the higher the investment efficiency of private enterprises in China.Therefore,reducing institutional transaction cost is crucial to the development of private enterprises in China.