Deleveraging and decapacity: A comparative analysis of corporate capital allocation based on asset reversibility.

China's stimulus policies have caused overleveraging and overcapacity for the sustainable development of most industries (particularly high-pollution and energy-intensive industries). Thus, deleveraging and decapacity have become the two best options for the above industries to achieve long-term sustainable development. Based on China's A-share listed companies from 2009 to 2019, this study investigated the effect of deleveraging and decapacity on corporate capital allocation using fixed effects, propensity score matching (PSM) and difference-in-differences (DID).