Theoretical And Empirical Research On The Governance Of Excess Capacity By M&A

Currently, excess capacity is one of the three biggest problems in the economy development of our country. Our country has also published a great deal of policies to encourage capacity exceeded industries to merge and reorganize. Steel industry is one of the most severely capacity exceeded industries. In 2015, our country’s crude steel yield was 805 million ton, while the actual consumption was only 704 million. There’re also some corpse enterprises in steel industry. Thus, it is of great importance to take steel industry as an example to research the govern mechanism of merger and reorganization in overcapacity industries.This paper researched the development history of steel industry in Europe, Japan and America, and found that these countries all solved the over capacity problem in steel industry through merger and reorganization. This paper used supply theory, researched the mechanism of merger and reorganization governed capacity exceeding, based on competition advantage theory, region development’s gradient transfer theory, efficiency differentiation theory and Schumpeter’s technical innovation theory on the aspects of optimizing capacity, improving industry concentration ratio and promoting technical innovation. After this, this paper calculated capacity use ratio, pure technology efficiency and scale efficiency through DEA method by the data of steel listed company from 2005 to 2014.This paper analyzed the total capacity use ratio, the capacity use ratio variation happened before and after merging and reorganization, and the capacity use ratio under the sight of region of listed company, the results show that the continuing low capacity use ratio of our country’s steel industry is caused by the continuous decline of scale efficiency. The results also show that merger and reorganization has a poor effect in solving the capacity exceeding problem in our country’s steel industry. There’s some region difference in our country’s steel industry development. This paper suggests to use successful experience from oversea for reference, paying attention to the integration after merger and reorganization, and promoting merger and reorganization across the regions actively.