Industrial Policy,Bank Lending Herding Behavior And Excess Capacity

After more than 30 years of sustained and rapid growth,the persistence of overcapacity issues in industrial areas has become a major constraint for China's economic “stable & improved” development.The 13 th Five-Year Plan for National Economic and Social Development of the People's Republic of China(2016~2020)highly concerned about this issue,and explicitly proposed to establish and perfect the long mechanism to prevent and resolve the overcapacity.When the present literature analyzing the overcapacity causes,most of them focus on the enterprise and local government,and ignore another important participant-banking sector.In China,the banking sector has a close relationship with government departments.Therefore,bank lending is affected more susceptible by industrial policy,and then the herd behavior came.Based on thispropose,this paper focuses on studying of the Bank loan herding behavior and its effects on overcapacity.First,on the basis of the theoretical model,this paper selects 16 listed Chinese Bank industrial loan data from 2005-2014,and using LSV model to test the existence of bank loan herding behavior.Second,this paper uses Data Envelopment Analysis(DEA)to measure 37 industrial capacity utilization and then examines the relationship between them by empirical test.Last,this paper tests whether the industrial policy is a adjustment variable for the herd behavior of China's bank loans and the overcapacity.The results show that:I.Herd behavior exists in China's bank loans.According to each bank loan to the industry increase(decrease)in the number or proportion of loan herding behavior overall test results are 15.92%(?),19.9%(?);the results show herd behavior obviously exists in China's bank loans.II.China's industrial overcapacity is serious.Overall,2004-2015 industrial general overstock index average was 0.425,it presents the first decline after an upward trend,in 2008,industrial general overstock index was 0.340,reached its lowest point,and at the same time overall industrial capacity utilization is highest.III.Bank loan herding behavior can significantly affect overcapacity.The industry bank loan herding behavior of size was correlated with excess capacity in the industry index.Granger causality test results further indicate that bank loan herding behavior will lead to overcapacity further deterioration.IV.Industrial policy will further deepen the bank loan herding behavior effects on overcapacity.The industry supported by industrial policy has the more significant bank loan herding behavior.Based on the results of the empirical analysis,this paper argues that from the following three aspects,resolve excess industrial capacity: first,Specification for information disclosure,constrained bank loan herding behavior;second,accelerate industrial restructuring and upgrading,adhere to the "going out" strategy;third,reasonable adjustment of industrial policy,grasp the “degree”.This paper's study has contributed to deepen the bank loan's herding behavior theory,from the angle of bank loan herding behavior understanding China's overcapacity causes;and meanwhile,this paper expands the study of formation mechanism of overcapacity in China,provides policy advice to dissolve excess capacity in China.