A Research On The Effects Of Factor Price Distortion On Industrial Overcapacity In China

Facing downward pressure on the economy and the problem of overcapacity,Chinese government put forward a new idea of supply side reform,Compared to the demand side reform,the supply side reform,which was considered as "Traditional Chinese medicine therapy",has been considered as a good way to solve the Chinese economy problems more effective.In simple terms,the goals of the supply side reform are to reduce the ineffective supply and increase effective supply,reduce the ineffective supply means reduce the supply of excess capacity and accelerate the elimination of zombie enterprises.By straightening out the factor market price relationship and eliminating the distortion of land,capital,labor,environmental pollution and other factors to resolve overcapacity.From the research situation,on the one hand,the researches about overcapacity from the point of view of factor price distortion are less,on the other hand,the researches of this angle are more qualitative researches.The researches about degree,mechanisms and regional differences of the effect that factor price distortion exerts on the overcapacity are not enough.Therefore,this paper is intended to explore overcapacity from the angle of factor price distortion,since the regional imbalances of overcapacity and factor price distortion,this paper will analysis the regional differences of the influence.The study not only fits the current economic reality,but also improve the theory of about overcapacity.This paper mainly includes the following four aspects:First,From the macro-definition of overcapacity this paper,based on the consumption and demand theory of western economics,establish a complete theoretical model to explain the relationship between factor price distortion and overcapacity.Through the analysis of demand side and the supply side,this paper comes to the conclusion that factor price distortions lead to overcapacity.Second,This paper add the energy factor into the traditional C-D function and calculate the factor price distortion of capital,labor and energy.From the trend of the time:factor price distortion showed an overall declining trend,but after 2009 the factor price distortion began a new round of the deterioration;from the regional differences:Eastern distortion degree is lower than the central and western regions;from factor price distortion heterogeneity:factor price distortion of capital and energy are higher than the labor.Third,this paper decompose the capacity utilization into the supply side capacity utilization and demand side capacity utilization,then measure and analyze the capacity utilization.The supply side capacity utilization was measured buy DEA method,the demand side capacity utilization is equal to industrial sales output value(current price)divided by total industrial output value.From the trend of the time:capacity utilization show the same trend with economic cycle,the fluctuation of capacity utilization has same trend with '5000 industrial enterprise prosperity diffusion index:equipment using;from the regional differences,the eastern regions capacity utilization is higher than the central and western regions.Fourth,this paper establish a system GMM model for each factor price distortion and factor price total distortions with capacity utilization,the empirical results show that each factor price distortion,factor price total distortions exert a negative effect on capacity utilization.And the regional differences analysis shows that the negative effect in eastern region is larger than the central and western regions.