Industry Nationalization,Credit Structure Imbalance And Excess Capacity

With the reform and opening up,China has realized the rapid development of economy with the investment led development model,as well as become the world's second largest economy.However,with the rapid economic development,various economic problems have been exposed and spread.Among them,overcapacity has been an important issue in the process of China's economic development.Since the end of last century,the problem of excess production capacity has become one of the most important contradictions in China's economic development.Since entering twenty-first Century,excess capacity has been endangering the chemical,cement,real estate,automobile,shipbuilding,steel and other industries,as well as photovoltaic,wind power and other emerging industries.Especially after 2008,affected by the global financial crisis,China's overcapacity problem is more serious.The government has adopted a series of economic policies to control the problem of excess capacity.However,although the problem of excess production capacity has long been sufficient attention of government departments,but the problem of excess capacity is not only not reduced,but more serious.Therefore,it is significant to study the causes of excess capacity and control measures to improve the economic development of our country and to stabilize the market environment.The causes of the problem of excess production capacity and the control measures have been widely discussed in the academic field.Based on the deficiencies of previous scholars,we improvethe research perspective.We will explore the fundamental causes of the problem of excess capacity in China's industrial sectors from two perspectives:the nature of the property rights of state owned enterprises and the imbalance of the credit structure under the intervention of the government.We first theoretically analyze the excess capacity from characteristics of industrial capacity utilization,the nature of state-owned property,credit structure and the impact of the economic crisis,and put forward four theoretical assumptions:1)The capacity utilization rate of all industries in our country is consistent with the economic cycle in general.2)Assuming that other conditions remain unchanged,the greater the degree of nationalization of the industry is,the greater the degree of excess capacity in the industry becomes.3)Assuming that other conditions remain unchanged,the higher the relative credit capacity of the enterprises is,the greater the degree of excess capacity becomes.4)After the global financial crisis in 2008,the government strengthened the influence of the property rights and credit structure of the state-owned enterprises on the excess capacity.Second,on the basis of theoretical analysis,we establish the empirical model.Third,we use the co integration method to measure the capacity utilization of 36 industrial sectors in China.Finally,we choose the individual fixed effect model to make empirical analysis on the variables,and verify the empirical results by changing the number of samples and measure indicators.Through theoretical analysis and empirical test,we draw the following conclusions:First,China's industrial overcapacity in the industry has long been showing the characteristics of institutional and cyclical.From the overall industry capacity utilization,when the economy is in the upward phase,the rate of the overall production capacity of China's industrial sector rise,and when the economic downturn especially in the economic crisis,the overall production capacity of China's industry utilization rate decreased,resulting in overcapacity.But in recent years,as China's economic recovery,China's overcapacity problem has been existed,and gradually deviated from its cyclical characteristics.In addition,China's industrial capacity utilization also has the characteristics of the system.The property right of state owned enterprises and the imbalance of the credit structure under the government intervention are the main factors leading to the problem of excess capacity in China.Second,the degree of nationalization of the industry has a significant positive effect on the impact of excess capacity.Controlled the technical characteristics,industry structure and influence factors of production,the empirical results show that the proportion of state-owned economy has a significant negative effect on capacity utilization,which has significant positive effect on overcapacity.Robustness test verifies the regression results are valid.This shows the extent of the nationalization of the industry is a major cause of China's industrial industry overcapacity,the state-owned enterprises and their special management model to promote business managers seek to maximize scale enterprises rather than to maximize efficiency,resulting in overcapacity occurs.In addition,in the process of economic development,the state mainly adjust the operation of the national economy by adjust state-owned enterprises.The coupling relationship between the nature of the state owned enterprises and the government policy makes the problem of excess capacity more complicated.Third,the impact of credit structure imbalance on the excess capacity has a significant positive effect.Controlled the technical characteristics,industry structure and influence factors of production,the empirical results show that the asset liability ratio of state-owned enterprises has a significant negative effect on capacity utilization,that is,it has a significant positive effect on excess capacity.Robustness test verifies the regression results are valid.This reflects the credit discrimination of financial system and the bank credit imbalance caused by the government's direct intervention in the decision-making of banks,making excessive credit resources to the state-owned enterprises,to provide an external incentive for enterprises to expand production capacity.Fourth,the economic crisis has strengthened the positive impact of the nationalization,the credit structure industry on overcapacity.In this paper,we add dummy variable,the result shows that the economic crisis of 2008 has strengthened the influence of the level of nationalization and the credit structure of our country on overcapacity.After the 2008 economic crisis,the government adopted the "four trillion" investment plan and a series of economic policies which led to the more serious overcapacity problems,fully illustrated the enterprise and the government to stimulate the expansion of state-owned enterprises from two aspects of inside and outside,making overcapacity aggravated.This adequately illustrates that the enterprise and the government from both inside and outside the two areas to stimulate the expansion of state-owned enterprises production capacity,making the excess capacity continues to increase.