Tradability,Exit Barriers And Excess Capacity

Overcapacity is one of China's long-term economic problems,there are many factors causing overcapacity,this paper focuses on the influence mechanism of tradability and exit barriers.Tradability influences the industry capacity release from the demand side,exit barriers influence whether companies can exit when facing overcapacity from the supply side.First,this paper summarizes the macro and micro factors causing overcapacity put forward by other papers,using traditional methods to calculate the industry capacity utilization from 2003 to 2016 in China.Then this paper establishes a panel data model to do an empirical analysis of the relationship between tradability,exit barriers and overcapacity.This paper finds out tradability and exit barriers are important factors influencing overcapacity in China,tradability has significant positive effects on overcapacity,exit barriers have significant negative effects on overcapacity.Finally,this paper puts forward some policy suggestions from the perspectives of tradability and exit barriers.