A Study On The Impact Of Local Government Behavior On Overcapacity

As an economic phenomenon,overcapacity is essentially that production capacity is in a large number of idle,and the overall performance of the industry level is low.Since the founding of the PRC,the Chinese economy has experienced six rounds of more serious overcapacity.Before the reform and opening up,the government led the economy,and overcapacity was the direct product of the government planned economy.After the reform and opening up,with the deepening of market reform,the reform direction of the socialist market economy has been clarified,and the role of the government in economic operation has changed.The government behavior is no longer the only way to allocate resources,and the market mechanism is more and more prominent to allocate resources.However,due to the imperfect design of the relevant system at this stage,the government,especially the local government,has become the main promoter of overcapacity.And this overcapacity caused by government action is generally referred to as the institutional overcapacity.The existing research literatures on the reasons for the formation of overcapacity in China mainly include three factors,namely,cyclical factors,strategic factors,institutional factors.More and more scholars attribute the institutional factors to the main reason for the formation of overcapacity in China at this stage and think that the behavior of local government is the main cause of overcapacity.In recent years,the study has found that the behavior of local government is actually a "institutionalized" performance.The system,as an important explanatory variable,is increasingly being applied to explain the behavioral behavior of the actor.Therefore,it is a feasible research perspective to explain the behavior of local government through the system and explain the related problems such as capital excessive entry,capital withdrawal obstacle and low performance in the process of overcapacity formation.The emergence of institutional economics provides a feasible perspective for the study of the behavior of the governmen,which provides theoretical support for explaining the specific behavior of the actors from the institutional point of view.Government behavior is regarded as a "institutionalized" realization.Therefore,this dissertation analyzethe behavior of the governmenton the impact of thecapital entry,exit and industry performanc through the establishment the paradigm of institutional-behavior-results.First of all,it discusses the characteristics of the behavior of the government in the specific institutional environment of China at this stage.The existence of local government is not just a set of institutions,which requires the central government to give its corresponding power.From the relationship between the central government and the local government after the founding of the People's Republic of China,the central government constrains the local government through the collection and decentralization of power.Under the institutional environment after the reform and opening up,the behavior of the government is more characteristic of economic self-interest.It is manifested in the dominance of the local government in the economy,the strengthening of the local government autonomy and the competition among the local governments.It is lead to the formation or exacerbation of overcapacity because of the existence of these characteristics of the behavior of the government,and the use of mathematical models to explain the behavior of local government characteristics of "induced" overcapacity mechanism.As the main factor affecting the formation of production capacity,capital in the entry and exit side of the configuration distortion is the formation of a direct representation of overcapacity.The study found that the market mechanism failed in the allocation of capital in the capital entry.In some industries,especially in industries with relatively severe overcapacity,the profitability of the industry is not obvious for the scale of investment in the industry.Among them,the role of the behavior of the government leads to distorting the role of market mechanism allocation resources,resulting in over-investment in the industry.The behavior of the government does exist motivation and way to "induce"over-investment,and through model setting,variable definition and empirical results,it is proved that the behavior of the government is easy to "induce" the over-investment of enterprises,and thus form overcapacity.At the exit side of capital,the behavior of the government may also lead to the failure of market mechanism allocation.By calculating the industrial sector industry capital withdrawal rate,we learned about the withdrawal of capital from 2006 to 2014 in various sectors of the industrial sector.Further analysis of the market factors and institutional factors for the specific impact of capital withdrawal,it is believed that the local government has the motive and way to hinder the withdrawal of capital,and through the model setting,the definition of variables and the empirical results,it proves that the behavior of the government will hinder the normal withdrawal of capital,resulting in excessive accumulation of capital stock.Once the industry has serious overcapacity,the overall performance level of the industry will decline,causing risks to the national economy.The behavior of the government will also affect the level of industry performance.Based on the SSCP model,the industrial sector with more overcapacity is selected as the research sample.The results show that although the empirical results show that the entry of state-owned property at this stage has a positive impact on the performance level of the industry,this may be related to the current state-owned property rights in the general competitive industry.Accounting for the proportion of high is not unrelated.At the same time also found that the local government in the performance appraisal system formed a convergence behavior,will lead to regional industrial structure convergence,in the formation of overcapacity at the same time seriously affected the industry's performance level.Finally,based on the influence of the existing institutional environment on the local government behavior,this dissertation seeks the way of institutional innovation,mainly from the financial system,performance appraisal system,the role of local government positioning,local government allocation of resources and other aspects of the corresponding measures,in order to achieve from the behavioral motives and behavioral path constraints on the purpose of local government behavior,reduce the possibility of institutional overcapacity.The main innovations of this dissertation include:(1)attempts to analyze the behavior patterns of local governments from the institutional point of view through the establishment the paradigm of institutional-behavior-results,and to demonstrate that these behaviors "induce" the formation of overcapacity,and provide an effective analysis to deepen the reform of the economic system and restrict the economic selfishness of the local government path.(2)attempts to establish a mathematical model,analysis under the performance appraisal system,by the local government-led economic development model easily lead to more than actual demand,reduce capacity utilization,regional industrial structure convergence.(3)attempts to calculate the capital withdrawal rate by measuring the change in capital stock(as measured by the number of changes in the number of firms in the industry)and the actual situation of the industry's exit,more accurately reflecting how the behavior of the local government led to the withdrawal of capital.