The Research Of The Inhibitory Effects Of Enterprise Innovation On Excess Prodution Capacity With The Consideration Of Government Interference

Excess production capacity began to appear in China’s process of economic development since the 1980s which is a big obstacle of taking social economy into the "new normal" in China’s industrialization. Excess production capacity leads to low capacity utilization level of enterprises at the micro-phase, enterprise development are severely constrained; furthermore, excess production capacity is a threat to sustainable macroeconomic development of China, low-cost repeated construction and investment, the low efficiency of capital utilization, industrial pollution caused by the deteriorating environment, increasing systemic economic risk, threatening the industrial upgrading process and economic restructuring process, thus affecting the economic stability and social development, and even may lead to the economic crisis. To achieve the transformation and upgrading of the industrial structure in the economic globalization, promoting economic growth and taking the innovation-driven strategy as endogenous energy, innovation and technology is the fundamental implementation. At the micro level, enterprises are the main body of innovation, and also the capacity expansion and digesting. The implementation of innovation-driven development strategy is undoubtedly a major new breakthrough, especially for the enterprise, introducing patents and technology, which should be turned to relying on their own independent internal research and development, developing with independent intellectual property rights of new products, new technologies and providing new services. Therefore, enterprise innovation has important and practical significance to alleviate excess production capacity.In addition, according to China’s actual conditions, the deficiencies in the system’s performance which show the existing formal institutional constraints of varying degrees, companies have business initiatives to get resources from the government, or the government seduces companies to increase investment, intervenes enterprises’ making economic decisions, gets involved in the companies’ operating and producing process in order to achieve economic and social objectives, which affects companies’ capacity utilization in varying degrees and scopes. And especially considering the "natural" connection between the state-owned enterprises and the government, excess production capacity phenomenon will become more and more serious.This paper is based on The Enterprise Surveys investigated by the World Bank and the Union troops in 2012 in China, uses the moderating effect and robustness equation to analyze the positive impact of innovation investments to capacity utilization empirically from the enterprise level, emphasizing the important inhibitory effects of innovation on excess production capacity and distinguishing different types of innovation to alleviate excess production capacity, and also researches government interference would weaken the inhibitory effects of enterprise innovation on excess production capacity. Thus it recommends the policies that governments should encourage enterprises to enhance the core innovative ability and improve business and institution environment for enterprises eventually.