Upon China's long-term and non-cyclical nature of overcapacity, previous studies mainly stress from the perspective of excessive government intervention, ignoring collusion between local governments and firms.In this paper, we take the coal industry as an example to explore heterogene-ous formation of overcapacity for firms under dual ownership structure, i.e., state-owned and private firms, for the first time. This paper points out that collusion is an important causation and resurgence of the private coal...