Research On The Correlation Between Overinvestment And Zombie Enterprises

In the context of China's economy showing a new normal,promoting supply-side structural reforms is a major innovation in adapting and leading the new normal of China's economic development.In the specific task of reform,"diminish the industrial capacities" is the top priority,and the effective solution to excess capacity is to speed up the phase-out of zombie enterprises.Zombie enterprises refers to the future do not have profitability,we must rely on long-term external support to survive.It cannot generate economic benefits.However,it occupies a large amount of resources such as land,energy,finance and labor in the market,resulting in a decrease in the efficiency of the overall utilization of resources,disrupting market order and increasing risks in the financial industry.It is imperative to clean up the zombie enterprise,and the research on the factors affecting the formation of the zombie enterprise is not only important for the fundamental management of the zombie enterprise,but also effectively prevents the normal enterprise from becoming a zombie enterprise.At present,the research on zombie enterprises mostly starts with macroscopic factors.This article studies the impact of overinvestment on the formation of zombie enterprises from the microscopic point of view,and further analyzes the mechanism of action between the two with the nature of equity and government subsidies.Through theoretical analysis and empirical research,this paper draws the following conclusions:(1)The over-investment behavior of enterprises exacerbates the possibility of enterprises becoming zombie enterprises.(2)Government intervention significantly affects the impact of overinvestment on the enterprises becoming zombie enterprises.The government intervention in this paper has become the nature of shareholding and government subsidies.Compared with non-state-owned enterprises,over-investment by state-owned enterprises is more likely to turn enterprises into zombie enterprises;Compared with those enterprises that have not received any government subsidies,over-investment by government-subsidized enterprises makes it easier for enterprises to become zombie enterprises.This paper analyzes in detail the mechanism of corporate overinvestment behavior aggravating the enterprise into a zombie enterprise from two aspects of theoretical analysis and empirical research,broadens the research horizon of the cause of zombie enterprise,and helps to prevent the emergence of zombie enterprises.