Studyon The Formation Mechanism Of Overcapacity In Chinese Iron And Steel Industry

For the past few years, overcapacity gradually exposed. Especiallyafter the2008financial crisis, overcapacity became more and moreserious. As a pillar industry of China, iron and steel industry has alwaysbeen the focus of prevention and control. However, as the overcapacity ofiron and steel industry becomes more and more complicated, it is moreand more difficult for preventing and controlling the overcapacity of ironand steel industry. Consequently, it is necessary to study and proof thereasonoftheovercapacityofironandsteelindustry.This paper research content is mainly divided into six parts. The firstpart is the introduction, it discusses the research background and pointsout the judgment of the overcapacity from the well-known saying of KarlMarx., then it discusses the research significance as well as methods. Thesecond part is review of the literature, it elaborates many research resultsabout the cause of overcapacity and other relevant concepts, then, it alsoleadsto theresearchideas of my own. Thethirdpart，this paperused ironand steel industry and enterprises overcapacity problem as thebreakthrough point, it leads to the motiveof overcapacityin iron and steelenterprises, and it also leads to such an assumption: the overcapacity ofiron and steel industry which is comes from excessive investment isevoked by their own motivation, it also related to the systematic andstructural factors. The fourth part, from the discussion of systematic andstructural factors in the overcapacity of iron and steel industry, it pointsout that the systematic factor is a main factor which help iron and steelenterprises enter the market and it prevent the enterprises from exiting themarket, meanwhile, it discuses that the structural factor result in a lot ofbackward production capacity, and the high exit barrier makes it exist fora long time.The fifth part, in the assumption in the third part the paper chose the amount of investment of iron and steel enterprises as the objectof study, and makes use of SPASS17.0software to verification of"Herding Effect". The sixth part, the paper comes to the conclusion andputsforward countermeasuresandsuggestions.It is found that the overcapacity of Chinese iron and steel industry, isneither a pure systematic overcapacity nor a pure structural overcapacity,thus, the overcapacity of Chinese iron and steel industry can’t entirelyblame to systematic factor or structural factor, and the research needsbased on the micro individual, the iron and steel enterprises. Theinnovation and contribution ofthispaper isthat，it takes iron andindustryand enterprises as the research starting point, combines with systematicand structural factors， after the empirical test, the paper draw aconclusion. The conclusion is that under the imperfect market economy,the overcapacity of Chinese iron and steel industry is a "Nearly Rational"choice of Chinese iron and steel enterprises, in factor, the systematic andstructuralfactorshavehelped themtocompletethischoice.