Research On The Influence Of Exchange Rate Fluctuations On Capacity Utilization Rate Of China's Industrial Enterprises

With china's economy opening more and more to the world,the capacity utilization issue of china's industrial enterprises must have characteristics of outside impact,as one of the important signal of price index,by exerting the function of resource allocation,it will have more and more important impact on capacity utilization rate of china's industrial enterprises.Based on the background of open economy,we research on industrial capacity utilization issue from the perspective of exchange rate fluctuations,which is helpful for us to realize the current capacity utilization situation of china's industrial enterprises,avoid exchange rate risk and use exchange tools to improve capacity utilization rate of china's industrial enterprises.Firstly,through qualitative and quantitative analysis,this paper analyzed the influence mechanism of exchange rate fluctuations on capacity utilization rate,we find that exchange rate can affect capacity utilization rate through international trade and foreign investment,we also find that the influence depend on export dependence rate,import penetration rate and the volume of foreign investment.Secondly,we calculate capacity utilization rate from 2005 to 2014 using data of 1128 industrial enterprises,we also analyzed the current situation of RMB exchange rate,export dependence rate,import penetration rate and foreign investment.Finally,establishing dynamic panel data model,we research on the influence of RMB exchange rate fluctuations on capacity utilization rate by GMM method of econometrics.Based on the above analysis,we get several conclusions:(1)The appreciation of RMB exchange rate have negative effect on capacity utilization rate of china's industrial enterprise,and it varies in different industries and areas;(2)The influence of RMB exchange rate fluctuations on capacity utilization relay on export dependence rate,the greater the export dependence rate,the influence is deeper;(3)The influence of RMB exchange rate fluctuations on capacity utilization relay on import penetration rate,the greater the import penetration rate,the influence is deeper,and the higher import penetration rate can decrease the negative influence of RMB exchange rate appreciation on industrial capacity utilization;(4)The influence of RMB exchange rate fluctuations on capacity utilization relay on foreign direct investment,the more foreign direct investment,the influence is deeper,and it can decrease the negative influence of RMB exchange rate appreciation on capacity utilization.According to the conclusions,this paper presents several suggestions from the perspective of open economy.We think that the government and enterprises should be aware of the risk of exchange fluctuations on capacity utilization rate,reform RMB exchange rate mechanism,and sometimes exchange rate policy can be used to control capacity utilization rate of china's industrial enterprises.As different industries and areas have different export dependence rate,import penetration rate and foreign investment,we should also be aware of that same exchange rate fluctuation may have different effect on enterprises of different industries and areas,so the government should use exchange rate policy properly.