Empirical Study On The Impact Of Industrial Overcapacity On Economic Growth

As the second largest industry to promote China’s economic development,the role and status of industry cannot be ignored.Based on the principle of balance between supply and demand in the market,when the investment boom cycle ends and production capacity really starts to be released,the contradiction between excess capacity and insufficient demand in the effective market becomes prominent,and the development of China’s industrial industry begins to be hindered.On the basis of macroeconomic growth theory,this paper first establishes a two-sector production theory model based on the macroeconomic phenomenon of industry,which discusses the impact of industrial overcapacity on economic growth theoretically.Secondly,among many methods of calculating productivity utilization ratio,the paper estimates the level of industrial productivity utilization in the quarter of 2005-2017 by selecting output sequence and deducing production boundary.The estimated results show that the industrial productivity utilization rate fluctuates periodically.Finally,based on the availability and validity of the existing data,the ECM vector error correction model of time series in quarter unit is established,and according to the theoretical model framework,four economic variables which have greater impact on economic growth are selected from the industrial influential factors.Meanwhile,the data selected from the quarter of 2005-2017 is used for empirical analysis of relevant variables indicators.Based on the existing results,this paper analyses how to efficiently reduce production capacity and puts forward some suggestions.The theoretical analysis shows that there is a strong correlation between industrial overcapacity and economic growth,and it will hinder economic growth to a certain extent.According to the existing theoretical analysis and further empirical research,the results show that the impact of excess capacity on economic growth is reverse,that is,the impact of capacity removal on economic growth is positive.In order to realize the strategic policy of stable macroeconomic growth,we should improve the utilization rate of production capacity,focus on training high-quality technical talents,constantly strengthen innovation,adjust the structure in time,avoid the obstacles to economic growth caused by excess production capacity,and then achieve stable economic growth.