The Impact Of Administrative Approval Reform On Enterprise Total Factor Productivit

Since 1992,China has gradually transformed from a socialist planned economy to a socialist market economy,with the market playing a major role in the economy.Although my country’s government control system has played an important role in history,it has not matched the development needs of the current market economy in some aspects.Chinese companies spend an average of 11.4% of their total time dealing with the government each year,which is about 5.6 percentage points higher than that of companies in other developed countries.The contradiction between economic system and administrative examination and approval has become more and more acute with economic development.Therefore,China has carried out a large-scale administrative examination and approval reform since the beginning of the21 st century,among which the establishment of an administrative examination and approval center is an important carrier and innovative form of the reform.The Administrative Examination and Approval Center is a comprehensive administrative service organization that integrates the comprehensive administrative functions of advice and information,examination and approval and charging,management and coordination,supervision and feedback.After the first pilot examination and approval center was established in Shenzhen in 1995,administrative examination and approval centers were subsequently established in various places,and reached a peak in the early 20 th century.As of 2015,more than 300 cities in China have established administrative approval centers,accounting for more than 90% of the total number of cities in the country.In this context,this paper discusses the impact of administrative examination and approval reform on the total factor productivity of enterprises,which has practical significance.This paper uses the data of A-share listed companies from 2006 to 2018,including data from about 300 prefecture-level cities across the country,and uses a multi-period DID model to study the impact of administrative approval reform on the total factor productivity of enterprises.(1)We first examine heterogeneity in terms of regions.When analyzing the samples according to different regions,the western,central and eastern regions all showed a significant positive correlation,but the effect in the western region was significantly better than that in the central and eastern regions.Our explanation may be caused by regional institutional conditions,ideological concepts,etc.(2)When considering individuals of different scales,large-scale enterprises have scale effects and strong economic strength,and are more willing to increase R&D investment than small enterprises.We also empirically find that large-scale enterprises are relatively more affected by the administrative approval reform,and their total factor productivity has improved more significantly.(3)a high level of rule of law is a key factor to ensure the implementation of the administrative examination and approval reform and make up for its shortcomings.When studying the role of the city’s rule of law level,it is found that the high level of the rule of law in the region plays a catalytic role in promoting the total factor productivity of enterprises through the reform of administrative examination and approval.In terms of mechanism of action: We verified that the reform of administrative examination and approval first provides a material basis for enterprises to increase R&D investment by reducing the institutional transaction costs of enterprises.At the same time,the reform of administrative examination and approval also promotes the entry of new enterprises,which increases the R&D rate of return of enterprises,induces enterprises to increase investment in R&D,and finally promotes the total factor productivity of enterprises.This suggests that policy makers need to strengthen the construction of the rule of law in cities,ensure that the reform of administrative examination and approval is truly implemented,and finally achieve the purpose of reducing institutional transaction costs.At the same time,from the process of administrative examination and approval reform affecting the total factor productivity of enterprises,we can see that institutional transaction costs and the increase in the rate of return on R&D investment have played a key role.The government needs to strengthen the promotion of policies to promote R&D,such as R&D subsidies,taxation Deductions,etc.,are coordinated with the administrative approval policy.