Enterprise Innovation,Political Connection And Enterprise Capacity Utilization Rate

Over the past 30 years of Reform and opening,China's economy has grown at an average annual growth rate of around 10%.Moreover,in a very short period of time,the income level has been reduced from low to medium.How ever,in the context of economic system transformation,China has pursued the Western developed countries with means of multi-investment,pollution first and then re-governance.Since the 1990 s,China has relied on investment to drive economy growth and promoted output and sales by increasing investment.The consequences of such excessive investment have led to a serious overcapacity in many industries,such as steel,coal and other traditional industries.Overcapacity is a normal phenomenon in the process of economic development.Moderate over capacity can promote enterprises to eliminate those "zombie enterprises" with low productivity and improve the overall production level of enterprises.However,the emergence of severe overcapacity,especially accompanying with the new economic normal state,will spread with a wide range caused by non-market factors.Overcapacity not only occurs in traditional industries,but also happens in some emerging industries.Overcapacity is extremely harmful and may has a serious impact on the development of China's macro economy.Under the new economic normal,in order to optimize the traditional industrial structure and resolve excess capacity,we must find new economic growth points.Today's companies face a variety of challenges,including diversification and diversification of market demand,increasingly fierce market competition,and Enterprises are constantly shortening the life cycle of product production.Therefore,under the background of China's gradual promotion of reform,Innovation may be a new economic growth point to alleviate the current overcapacity phenomenon.China's private enterprises are important part of the socialist market economy,and it makes important contributions to the rapid development of the market economy.However,under the transition background of market economy,private enterprises are still weak,and encounter problems such as difficult financing.Therefore,private enterprises are eager to establish political relations with the government.They not only expect to obtain the same privileges and resources as state-owned enterprises,but also expect more room for development,so that enterprises can develop stably and healthily.However,these governmental support measures and government subsidies often boost the overcapacity of private enterprises instead.The reason exists that private enterprises obtain resources and conditions through political connections to stimulate their capacity expansion,resulting in excess production capacity.In summary,under the background of Chinese system,the active establishment of political relations between private enterprises and the government will generate a major impact on the business activities of enterprises.Therefore,this paper considers political connection,and further studies whether political connectio n plays a regulatory role in the process of enterprise innovation affecting the capacity utilization of enterprises.This paper takes a sample of all private companies listed on the Second-board Market from 2010 to 2017 to study the relationship between enterprise innovation,political connection and enterprise capacity utilization through linear regression.Research results show that enterprise innovation has a positive impact on the capacity utilization rate of enterprises within certain range;political connection has a significant negative impact on enterprise innovation and capacity utilization;political connection has a reverse adjust ment effect in the relationship between enterprise innovations and enterprise capacity utilization.