Research On The Impact Of Price Distortions On Variable Capital Factors On Overcapacity

In recent years,the economic development of our country gradually tends to be gentle.The negative impacts brought by the extensive economic growth mode have gradually become more prominent.Such as environmental deterioration,Overcapacity,etc.,among which the Overcapacity is one of the most serious and influential issues.From the perspective of enterprises,Overcapacity will lead to an increase in product inventories,a drop in enterprise profits,and even bankruptcy due to management difficulties.From the perspective of the entire economic operation,it will lead to a waste of idle resources,leading to an increase in the unemployment rate,inflation and even threaten the operation of the entire economy.Therefore,it is of great theoretical and practical significance to study the problem of overcapacity,and the rational allocation of variable capital elements is the key to solve the problem.According to Marxist economic theory,the purpose of capitalists' investment is to pursue the maximization of the residual value,and the maximization of the residual value depends on the rational allocation of the factors of production,especially the variable capital factors.Under a perfect competitive market environment,the price can accurately reflect the value of the factors of production,that is,the factors of production can flow freely between markets.When markets reach equilibrium,all capitalists receive the same surplus value rate,and there is no problem of overcapacity.However,when the factor price distorts,the factor price will deviates from its value.When the market equilibrium is reached,there will be a certain difference in the surplus value rate among different industries.The industries with higher surplus values are more favored by capitalists,thus affecting the capitalist's investment strategy.When this phenomenon is extended to the entire industry,it will affect the investment situation in the whole industry.If the investment in an industry is overheated,it will easily lead to overcapacity.As the variable capital is the source of surplus value,it has more pronounced effect on capitalist's investment strategy as well as on overcapacity.It is of great significance to study the effect of price distortion of variable capital elements on overcapacity.Firstly,this article summarizes the domestic and foreign scholars' literature about the distortion of price of variable capital elements and overcapacity.On this basis,trying to explore the mechanism of the overcapacity caused by the price distortion of variable capital factors with Marxist economic theory and western economics theory.Secondly,this paper uses the CD production function method and co-integration method to measure the variable capital factor price distortions and overcapacity situation in our country,and analyzes the distribution characteristics of price distortion and overcapacity from the perspective of the industry and the region.Then,this paper empirically analyzes the influence of price distortions of variable capital elements on overcapacity by constructing panel data model,and analyzes the empirical results.Finally,on the basis of the conclusions drawn above and the relevant literature,this paper puts forward some practical suggestions,hoping to provide some references for the optimization of factors allocation and the reduce of overcapacity.The main conclusions of this paper include the following aspects: 1.Variable capital elements price distortion.In the studied industries of this paper,there is a positive distortion in the price of variable capital elements in most industries,and the top seven industries with more serious factor price distortions belong to the key overcapacity industries;From an industry perspective,the price distortions of variable capital factors generally show "phased" changes;From a regional perspective,the price distortion of variable capital factors presents regional heterogeneity.2.Overcapacity.There are seven major industries in the industry with serious overcapacity,mainly including Manufacture of Paper and the Paper Products industry,Manufacture of Nonmetallic Mineral Products,etc;From an industry perspective,the capacity utilization rate of most industries shows the opposite trend with price distortion of variable capital elements;From a regional perspective,overcapacity also shows regional heterogeneity.3.The empirical aspects.The impact of price distortion of variable capital elements on capacity utilization is negative;the impact of innovation level on capacity utilization is positive;the effect of government intervention and nationalization on capacity utilization is negative;the impact of industrialization on capacity utilization is uncertain.According to the above conclusions,relevant policies and suggestions are put forward: 1.To speed up the process of labor market integration;2.To reduce direct government intervention by local governments;3.To actively promote technological progress;4.To speed up industrial structure adjustment and promote industrial upgrading.