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The Reform of Administrative Approval System and the Evolution of Enterprises' Productivity Distribution

【Authors】
GUO Xiaonian, SHAO Yihang
【WorkUnit】
GUO Xiaonian (Xiamen University, 361005)SHAO Yihang (Shanghai University of International Business and Economics, 200336; Xiamen University, 361005)
【Abstract】

The productivity distribution is regarded as an important index to measure the resource allocation efficiency. As an important market-oriented reform, whether the administrative service center has affected the production efficiency is a hot topic for researchers. This paper focuses on whether the reform of administrative approval changes the productivity distribution and what the mechanisms are. Based on the analysis of micro-enterprise data, this paper shows that the reform of administrative approval significantly reduces the dispersion of productivity distribution. This conclusion is robust, and the working mechanism is the market selection effect and incentive effect on enterprises with different productivity levels. Further empirical analysis shows that there is no significant difference between enterprises in technological innovation promoted by the administrative approval reform. The dispersion of productivity distribution is reduced mainly through the low-productivity incumbents improving management methods and reducing their management costs.

JEL:L59, D02, O25

【KeyWords】
The Reform of Administrative Approval System, Productivity Distribution, Management Cost