Empirical Research on the Influence of Overcapacityon Economic Growth in China Based on VAR Model

Abstract

Based on data availability, a time-series VAR econometric model with quarter as unit was established and quarterly data from 2005 to 2017 were selected for empirical analysis and test of relevant indicators. In this paper, based on the present stage to production, from the aspects of theoretical and empirical analysis of industrial capacity utilization, industrial growth rate of fixed assets investment, industry growth rate of total employment in the three sides facing the impact of economic growth. Studies show that over capacity has a strong correlation with economic growth and a negative impact of overcapacity on economic growth can be concluded from the impulse response map constructed, i.e. de-capacity has a positive impact effect on economic growth. In order to realize the strategic policy of steady growth of macro economy, we should increase capacity utilization, pay attention to training high quality technical personnel and adjust structure. Avoid the obstacles to economic growth caused by overcapacity, and thus achieve steady economic growth.