An Empirical Study of Market Reform in China's Civil Aviation Industry

Since 1978,market reforms have been introduced to deepen the proper-ty rights and improve the efficiency of the industry.The "theory of contestable markets" shows that the administrative border in CAAC is gradually narrowing due to the development in science and economy.As a consequence of this,it is necessary for the government to re-adjust the administrative border.Analysis introducted by dummy variable revealed that the three structure-changing coefficients in 1978,1987,2002 are respectively 0.28,0.13 and 0.48.There are sufficient evidence proved that Reform played a crucial role on the development of CAAC.