Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand o...Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand of a promising industry. Second, in its model, overcapacity is explained as a deviation from equilibrium under the incomplete information hypothesis, which is in fact nothing but normal in a market economy. The prime reason for overcapacity resides in the fact that local governments are engaged in a subsidy competition to attract investment. We endeavor to illustrate the following via modeling： the subsidy effect produced by local government＇s offering of cheaper land and matching loans results in less investment from companies. Under this circumstance, enterprises channel a disproportionate amount of funding to building production capacity, which overloads the entire industry. To address the problem, reforms are needed in land property, environmental protection policies, and financial and fiscal systems.展开更多
With the implementation of the CPC＇s eight-point regulation as a natural experiment platform, this paper seeks to unravel the causality between rent-seeking and firm performance for SOEs and private firms respectivel...With the implementation of the CPC＇s eight-point regulation as a natural experiment platform, this paper seeks to unravel the causality between rent-seeking and firm performance for SOEs and private firms respectively. Our empirical research has found that after the release of the ＂eight-point regulation ＂, investors responded negatively to private frms and positively to SOEs. Such market response is more significant for firms with a high degree of rent-seeking. Further research has found that rent-seeking helps both SOEs and private firms receive more subsidies from the government. While government subsidy from rent-seeking is conducive to the performance of private firms, it is not the case for SOEs. This implies that rent-seeking activities serve as a ＂lubricant＇for private firms but have a ＂stumbling block＂ effect for SOEs.展开更多
基金This paper is sponsored by the Chinese National Social Science Foundation Project Industrial Overcapacity, Redundant Construction in the Transitioning China： Formation and Management （grant 09AZD017）, the Chinese National Social Science Foundation Project ＂Overcapacity Management and Reform of the Financing System （grant 09AJY002）, the Chinese National Social Science Foundation Project ＂Restructuring and Revitalization Planning of Key Industries in China＂ （grant 10zd＆026）, the Chinese National Social Science Foundation Project ＂A New Industrialized Path： Industrial Restructuring and Upgrading （grant 06＆ZD002）, MOE Project of Key Research Institute of Humanities and Social Sciences in Universities Financial Innovation, Capital Market and Regional Economic Growth （grant 10JJD790027） Nanjing University ＂985＂ Project of Humanities and Social Sciences ＂Improving indigenous innovation capability in China＂ （grant NJU985FW01 ）
文摘Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand of a promising industry. Second, in its model, overcapacity is explained as a deviation from equilibrium under the incomplete information hypothesis, which is in fact nothing but normal in a market economy. The prime reason for overcapacity resides in the fact that local governments are engaged in a subsidy competition to attract investment. We endeavor to illustrate the following via modeling： the subsidy effect produced by local government＇s offering of cheaper land and matching loans results in less investment from companies. Under this circumstance, enterprises channel a disproportionate amount of funding to building production capacity, which overloads the entire industry. To address the problem, reforms are needed in land property, environmental protection policies, and financial and fiscal systems.
基金"A Study on the Rent-seeking,Political Capital Burst and Economic Consequences of Private Enterprises,Based on the Perspective of Officials Arrest"(Grant No.71702178),National Natural Sciences Foundation"Anti-Corruption,Reconstruction of the Relationship Between Government and Enterprises Social Capital Investment:An Integrated Research Based on Social Relation Network Theory"(Grant No.17YJC790005),MOE Project of Humanities and Social Sciences Foundation
文摘With the implementation of the CPC＇s eight-point regulation as a natural experiment platform, this paper seeks to unravel the causality between rent-seeking and firm performance for SOEs and private firms respectively. Our empirical research has found that after the release of the ＂eight-point regulation ＂, investors responded negatively to private frms and positively to SOEs. Such market response is more significant for firms with a high degree of rent-seeking. Further research has found that rent-seeking helps both SOEs and private firms receive more subsidies from the government. While government subsidy from rent-seeking is conducive to the performance of private firms, it is not the case for SOEs. This implies that rent-seeking activities serve as a ＂lubricant＇for private firms but have a ＂stumbling block＂ effect for SOEs.
