Research On The Impact Of Corporate Governance On Overcapacity

Based on the World Bank’s 2012 survey of 2,700 companies in China and its integrated database of Chinese companies,1,657 companies are found to have measured capacity utilization.The proportion of enterprises with overcapacity problems reaches 25.77%,and the ratio of enterprises with overcapacity in state-owned enterprises even reaches 24.50%.According to the data provided by the wind database,comparing the capacity utilization rates of different industries,it is found that the overcapacity problem are serious which have influenced many industries.Overcapacity not only limits the production and operation of the company itself,but also affects the sustainable development of the country’s economy from a macro perspective.Therefore,effectively alleviating overcapacity has gradually become the top issue of China’s economic development.The most direct cause of overcapacity is the excessive investment of enterprises,and the excessive investment behavior of enterprises reflects the integrity of corporate governance structure.Therefore,this paper chooses to analyze the influence mechanism on overcapacity from different perspectives of corporate governance.Based on Upper Echelons Theory,overconfidence theory and Principal-agent Theory,using the Chinese data in the 2012 WBES Business Environment Survey database and the relevant characteristics of corporate executives,equity concentration and equity nature are used as measures of corporate governance,and capacity utilization is taken as capacity-A measure of excess.In the empirical part,the instrumental variable method is used to eliminate the endogeneity problem in the model;the variable substitution method is used to test the robustness.Then,the following conclusions are obtained empirical analysis:(1)The longer the terni of the enterprise executives is,the lower the enterprise capacity utilization is;the investment decision of male executives tends to engage over-investment,which reduces the capacity utilization rate of the enterprise;(2)the higher the shareholding ratio of the largest shareholder is,the lower the capacity utilization rate of the enterprise is;(3)It will reduce the capacity utilization rate of enterprises that enterprises increase the government’s share of ownership in it.Finally,based on the mechanism analysis and empirical results test,this paper proposes relevant countermeasures and suggestions:(1)To innovate in the management system of the executives;(2)To reduce the concentration of the company’s equity;(3)To control the proportion of the government’s shareholding in the enterprise;(4)To Accelerate the elimination of backward production capacity.