Institutional Exit Barriers And Overcapacity In The Ship Manufacturing Industry

With the continuous advancement of structural reforms on the supply side,“De-capacity” in “Three trips,One drop and One supplement” is still a task faced by the Chinese manufacturing industry.China is one of the three largest shipbuilding countries in the world.The problem of overcapacity in the shipbuilding industry is also very prominent.The overcapacity of the shipbuilding industry is similar to the formation of overcapacity in other state-owned capital-dominated industries such as steel and cement,and is a cumulative surplus related to institutional exit barriers.Through the definition and quantification of institutional exit barriers,the paper estimates the relationship between institutional exit barriers and overcapacity based on listed company data.The main contents are as follows: The first part introduces the background and significance of the topics selected,and reviews the literature on government intervention and excess capacity.The second part makes a statistical analysis of the market status,market structure and market performance of the shipbuilding industry.The third part quantifies the main government intervention indicators of institutional exit barriers,and applies the DEA data envelopment analysis method to measure the capacity utilization rate of the shipbuilding industry.The fourth part is an empirical analysis of government intervention and excess capacity.The fifth section analyzes the experiences of the shipbuilding industry in South Korea,Japan,and Germany in resolving production capacity.The sixth part is the research conclusions and policy implications.Following are the main conclusions:(1)The shipbuilding industry has a low market concentration.Most of the companies are small.Large-scale state-owned shipbuilding enterprises occupy most of the policy resources,but their economic benefits are not obvious;(2)Institutional exit barriers are high.The government’s intervention in economic and political objectives does not effectively increase the output value and employment level of the industry;(3)Shipbuilding industry has low capacity utilization rate,and it still needs to adhere to the task of shipbuilding industry to remove production capacity;(4)Over-investment in listed companies.Corporate overinvestment is significantly positively correlated with government loan support.This suggests that the government’s increase in loan support will stimulate overinvestment by enterprises.The main motivation for government intervention is to increase the industry’s GDP contribution;(5)The empirical results show that government intervention has a significant effect on overcapacity and overinvestment by companies.However,government intervention does not indirectly lead to overcapacity as a result of overinvestment by companies.The increase in government intervention will increase the overcapacity.To manage this institutional overcapacity,we should weaken and even cancel various subsidies,and eliminate the non-market factors that block the withdrawal.The bankruptcy,mergers and reorganizations and other reforms,the establishment of special assistance funds to solve the problem of staffing and other issues facing capacity elimination should be complementary institutional arrangements.Ultimately,an endogenous mechanism based on market economy solves institutional excess production capacity.