Game Analysis And Empirical Test Of The Cause Of Overcapacity

In order to explain why there is industry selectivity in overcapacity,the impact of policy on industry and enterprise capacity utilization,and the role of financing cost differences between enterprises on overcapacity,this paper builds a two-stage dynamic game model for local governments and two enterprises,and selects government subsidies outside the industry,demand price elasticity differences between industries and financing cost differences between enterprises within the industry as impact variables to analyze the causes of overcapacity,and then builds a econometric model to empirically examine the impact of government subsidies and financing costs on capacity utilization.Econometric analysis and empirical analysis both explain and corroborate the results of the game theory.The results show that:(1)Companies of different ownership are affected by government subsidies,leading to a higher risk of overcapacity;(2)Price elasticity is negatively correlated with the degree of industry overcapacity,and price elasticity affects enterprise capacity utilization by influencing the outcome of competitive equilibrium,which is not monotonic;(3)Financing costs have a negative impact on industry capacity utilization,and the difference in financing costs of enterprises has a spillover effect on overcapacity,specifically,an increase in relative financing costs of enterprises will increase their own capacity utilization and reduce the capacity utilization of other enterprises;(4)Capacity utilization is not related to enterprise size,but has a significant positive correlation with the proportion of state-owned enterprises and labor intensity.Credit differences between firms of different ownership do not have a significant impact on industry capacity utilization.The final paper proposes that in order to resolve overcapacity,there is a need to reduce policy dependence,release price elasticity,deepen reform of state-owned enterprises,focus on cleaning up "zombie enterprises" and alleviate the expensive financing problems of micro,small and medium-sized enterprises,and establish an effective exit path for capacity.