Government Intervention,Enterprise Innovation Ability And Overcapacity

The phenomenon of overcapacity derived from the repeated construction of the home appliance industry in the beginning period of reform and opening up.However,during the last 40 years of reform and opening up,overcapacity gradually expanded into various fields of manufacturing,such as steel,cement,coal chemical,flat glass,and even some emerging ones.Moreover,industries such as poly-silicon,photovoltaic,and wind power industries have also experienced low-end overcapacity.Of course,the issues of overcapacity have attracted widespread attention.For example,the overcapacity will bring a series of adverse consequences to enterprises,society,and economy,causing waste of resources and environmental pollution.Under the GDP-centric promotion mechanism and institutional factors of financial incentives,companies blindly invest in capital-intensive,energy-intensive,extensive industries or the low-end links of emerging industries that are quick to increase fiscal revenue in a short period of time,neglecting long-term interests lags far behind time-consuming,risky,technology-intensive high-end industries or links.The government has also interfered too much.Preferential policies have distorted the prices of essential resources,making it possible for marginal production capacity to make profits even if they do not withdraw from the market,and thus obstruct the exit channel for backward production capacity.At the same time,the status quo of overcapacity is inseparable from the low added value of China's manufacturing enterprises and the lack of core technologies.The source of all this is the lack of innovation capability of Chinese enterprises.On the one hand,at the stage of capacity formation,due to the lack of innovation capability,the backwardness of the technological level has caused companies to invest in low-tech industries,and has increased the repeated construction and over-investment of capital-intensive industries.On the other hand,at the stage of dismantling the production capacity,the low-tech level has restricted companies from developing advanced production lines,producing advanced products,and providing competitive services.A large number of backward and outdated production capacities are continuously accumulating,creating a vicious cycle and overcapacity.Due to the lack of innovation capabilities and backward technology,products produced do not have a competitive advantage in terms of performance,quality,and cost compared with similar products in countries with advanced technologies,thus creating barriers to product “going out”.Under this background,improving enterprise's ability to innovate has become a solution to the development of the era of overcapacity.This paper proposes that we should start from the subjective initiative of micro-enterprises to improve the enterprise's innovation capability.And in addition to the direct intervention of the government for enterprises due to institutional reasons.The overcapacity should also be based on the perspective of the company itself,and the government's indirect intervention of the government's informal payments to the government will inhibit the ability of the company to innovate.This article will mainly discuss.It is also of great practical significance to provide a new idea for resolving the overcapacity by giving play to the dynamic nature of the company.This article categorizes domestic and foreign documents and classifies it,summarizes the causes of overcapacity,and resolves excess capacity.It starts with the subjective initiative of micro-enterprises to improve their innovation capabilities.In addition to institutional reasons that overcapacity caused by direct intervention,this article will mainly discuss the enterprises' initiative to provide informal payments to the government.And select the proxy variables such as capacity utilization rate of enterprises,innovation ability of the enterprise,and government intervention,and put forward two hypotheses based on theoretical analysis which tested by establishing a robust regression equation.The empirical analysis proved two hypotheses put forward in this paper.Hypothesis 1 is that the improvement of the enterprise's innovation capacity can restrain excess production capacity,that is,increase the capacity utilization;Hypothesis 2 is that excessive government intervention will inhibit the enthusiasm of the enterprise's innovation and impede the improvement of the enterprise's innovation ability.