The spatiotemporal effect of factor price distortion on capacity utilization in China’s iron and steel industry

Xiaolei Wang, Renxin Deng and Yufang Yang

Resources Policy, 2023, vol. 86, issue PA

Abstract: Under the situation of global climate change and green transition, China’s iron & steel industry (ISI) faced great pressure to energy conservation and cut backward overcapacity. To explore the characteristics of overcapacity and inherent impacting factor of capacity utilization, the study focused on the relationship of incomplete input factor market and overcapacity. Based on provincial data from 2003 to 2019, the study estimated capacity utilization rate in China’s ISI sector, and further evaluated the impact of factor price distortion on capacity utilization rate and its spatiotemporal effect through dynamic spatial model. Firstly, the capacity utilization rate China’s ISI sector showed regional heterogeneity with an average level of 68%, and the capacity utilization rate would be promoted by previous capacity utilization rate and capacity utilization rate of neighbor provinces; Secondly, capital and energy price distortion showed significant negative effect on capacity utilization, while labor price distortion positively promoted capacity utilization; Thirdly, from the perspective of spatial effect, capital price distortion showed significantly negative effect on capacity utilization. Therefore, deepening factor market reform and reducing the intervention of local government would be effective way to improve capacity utilization and promote cleaning production.

Keywords: Factor price distortion; Capacity utilization rate; Spatiotemporal effect; Dynamic spatial model (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420723008620
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:86:y:2023:i:pa:s0301420723008620

DOI: 10.1016/j.resourpol.2023.104151

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().