Abstract

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Author(s):: SHI Yazhou; School of Economics and Management，Xi ’an Aeronautical University，Xi ’an 710077，Shaanxi，China

Keywords:: institutional transaction cost; private economy; business environment; neutral competition; openingup to the outside world; supplyside structural reform

Abstract:: Institutional transaction cost affects the better play of the role of the government, and hinders the improvement of the business environment. Therefore, this paper summarizes the connotation, characteristics and performance of institutional transaction cost in economic operation, and analyzes the social and economic root causes of its generation. According to the research, institutional transaction cost is an important component of the "cost reduction" measures in the supplyside structural reform. Rooted in the evolutionary game between the government and the market, it boasts of the characteristics of objectiveness, changeability and elusiveness, and is closely related to nonneutral competition policies in the economic field. The degree and breadth of openingup to the outside world affects the level of legalization and internationalization of economic rules and is the external factor in improving institutional transaction costs. This paper suggests that we foster a sound business environment and achieve highquality economic development by giving play to the decisive role of the market in resource allocation, deepening reform of the administrative system, giving better play to the role of the government, pursuing neutral competition policies, and further expanding the opening up.