Proceedings of the 2018 International Symposium on Humanities and Social Sciences, Management and Education Engineering (HSSMEE 2018)

Research on the Impact of Different Amount of Subsidy with Regard to Overcapacity: Evidence from Steel CO. in China

Authors
Xinxiang Mei, Xi Peng
Corresponding Author
Xinxiang Mei
Available Online September 2018.
DOI
10.2991/hssmee-18.2018.50How to use a DOI?
Keywords
subsidy, overcapacity, rent-seeking, R&D investment.
Abstract

Government subsidy have an important impact on the production capacity of steel enterprises, it is yet unclear whether they reduce or aggravate enterprises’ overcapacity. We take the firm-level data of steel enterprises from 1998 to 2014 as a sample, the methods of Propensity score matching (PSM) and Difference-in-Difference (DID) are used to address the impact of government subsidy on overcapacity. The results show that government subsidy have not a generally significant impact on the overcapacity of enterprises, since the different levels of government subsidy on overcapacity has offset each other. Low-level subsidy has no significant impact on the overcapacity. The effect of medium-level subsidy is positive and statistically significant. While, the coefficient of the huge-level subsidy is significantly negative, indicating that enterprises with huge-level subsidy have more serious overcapacity. Furthermore, Mediation model is applied to provide strong evidence that rent-seeking investment and the weakening of research and development (R&D) incentives are the important channels for the huge-level subsidy curbing overcapacity.

Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 2018 International Symposium on Humanities and Social Sciences, Management and Education Engineering (HSSMEE 2018)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
September 2018
ISBN
978-94-6252-604-4
ISSN
2352-5398
DOI
10.2991/hssmee-18.2018.50How to use a DOI?
Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Xinxiang Mei
AU  - Xi Peng
PY  - 2018/09
DA  - 2018/09
TI  - Research on the Impact of Different Amount of Subsidy with Regard to Overcapacity: Evidence from Steel CO. in China
BT  - Proceedings of the 2018 International Symposium on Humanities and Social Sciences, Management and Education Engineering (HSSMEE 2018)
PB  - Atlantis Press
SP  - 295
EP  - 306
SN  - 2352-5398
UR  - https://doi.org/10.2991/hssmee-18.2018.50
DO  - 10.2991/hssmee-18.2018.50
ID  - Mei2018/09
ER  -