Research on the Relationship between the Capacity Utilization and Fixed Capital Investment in Panel Cointegration：An Empirical Study Based on 28 Manufacturing Industries
This paper makes use of 28 manufacturing industries of China from 1997 to 2006, chooses the panel cointegration theory to analyze the relationship between the capacity utilization and fixed capital investment empirically after using the cost function method to measure the capacity utilization rate. The empirical study result shows that there exists cointegration relationship between the capacity utilization rate and fixed capital investment, but the intensity exists remarkable discrepancy among the industries. Meanwhile, the positive relationship between the capacity utilization rate and fixed capital investment of some industries also indicates that the adjustment of capacity utilization lags the demand variation due to the deviation between anticipation and reality of the firms, and then leading to the wave phenomenon of the investment.
