Abstract:

Key words: Abstract:According to the theory of contestable markets, to promote the contestability of certain markets would make them perform better. To industrial organization theorists, sunk cost is the most important factor to effect contestability. So far, there is no specific methods to＂ evaluate the magnitude of contestabillty. Nowadays, statutory regulation is the key factor to hinder China＇ s markets getting more contestable. The reform, which is characterized by marketization, is not carried out simultaneously in all the industries, and there are significant gaps among different regions during the reforming process. This suggests us to take both industrial and regional aspects into account when we analyzing the markets＇ contestability. This paper calculates the contestability index by multiplying the ratio of non-state-owned economy and regional marketization indices. Quantitative analyses show that economic performance can be made better along with the contestability grows