The Tenure Of Oiffcial，Promotion And Over-investment

Excess capacity which caused by the enterprise Over-investment has becomethe short board of economic development and directly related to the economicefficiency and benign development. It has been widespread concerned. Theeconomic are closely related to the circumstance which they are existed. So theresearch of enterprises activities can not stop at the internal system, should put in abroader space.Classical theory revealed the essence of Over-investment, described theinfluence of enterprise characteristics. The concept of Modern institutionalEconomics require us pay attention to the influence of political behavior to theeconomic activity. Therefore this paper perspective to rent-seeking, analyze therent-seeking activities in the political and economic. Consider that the officials’promotion is the transformation of different forms rent. In order to seek rent steady,local government and enterprise reached a contractual relationship. On this basis, weresearched the relationship between the term and promotion of local governmentofficials and enterprise Over-investment. Through the research we have found that ifthe municipal officials under the pressure of promotion, they will intervening theenterprise Over-investment, and their terms have the positive impact to the level ofenterprise Over-investment, while their promotions have the opposite effect. Thispaper provides the empirical evidence for our country reform direction and corporategovernance.