As one of the main subjects involved in the market economy activities,government plays three roles: economic participants,policy makers and economic controllers.Our government is transformed from the original economic planner and implementer into the real market actor since the reform and opening-up,meanwhile,the “economic man” characteristics of the government are becoming more and more obvious.Local government competition became a feature of government behavior.Local government competition,based on financial incentives and promotion incentives,can be realized by affecting the production behavior of micro enterprises with government subsidies and other preferential policies.And the competitive subsidy policies of local governments have driven down the cost of enterprises and distorted the investment and production behavior of enterprises,eventually,leading to excess capacity.As a chronic disease in economic development,overcapacity is one of the most important macroeconomic risks in China.In order to describe the transmission mechanism preferably,this paper discussed the mechanism of action between the excess capacity and local government competition in China by using economic theory and empirical examination from a microscopic perspective.(1)At the theoretical level,externalization theory has been used to analyze the close relationship between local government rivalry and excess capacity.(2)From an empirical perspective,the paper takes the coal industry as an example,uses 24 coal industry listed company financial statement data in 2008-2016 on the basis of measuring their capacity utilization,and establishes a mechanism model included core means that the government subsidies,land and financial support as,then verifies the correlation between the local government competition behavior and excess capacity in microscopic view.(3)Six hypotheses are verified,respectively,the government subsidies provided by local governments are significantly positively correlated with the overcapacity of coal enterprises,and there is no U-shaped relationship between them;the distortion of land prices is the main cause of excess capacity,and it has showed a positive correlation;the level of financial support obtained by coal enterprises is positively correlated with the overcapacity of coal enterprises;the interaction between landand finance can play a positive role in alleviating overcapacity;state-owned coal enterprises are more prone to excess capacity than non-state-owned coal enterprises;the impact of local government competition on excess capacity has regional differences,because the coal companies are in the different areas. |