Impacts Of Environmental Regulations On Capacity Utilization

As the world’s second largest economy and a large manufacturing country,China’s manufacturing industry occupies an important place in the national economy.However,manufacturing is the main sector of energy consumption.While making a huge contribution to economic growth,there are also hidden dangers of high investment,high energy consumption and high emissions in manufacturing.And with the emergence of overcapacity in the manufacturing industry,this will also have a negative impact on economic development.According to Porter’s hypothesis,environmental regulation can stimulate technological innovation.And technological innovation can increase product competitiveness,expand market demand,and effectively increase capacity utilization.Therefore,it is of great practical significance to verify whether environmental regulation policies can achieve the win-win effect of environmental pollution control and overcapacity resolution.As the focus of industrial upgrading,the production behavior of high pollution industries in the manufacturing industry should receive more attention.This article mainly explores the impact of environmental regulations on capacity utilization from the high pollution industry level.At present,there are many types of environmental regulation policies in China.Different types of environmental regulation policies have certain differences in terms of applicable conditions and principles of action,which may cause different effects on capacity utilization.This paper empirically analyzes the impact of market-inspired environmental regulation and command-controlled environmental regulation on capacity utilization.The main conclusions are as follows:(1)Both market-inspired environmental regulation and command-controlled environmental regulation can positively affect capacity utilization.And the promotion effect of market-inspired environmental regulation should be more significant;(2)The market-inspired environmental regulation can promote technological innovation,and the Porter hypothesis has been verified;however,there is no significant correlation between command-controlled environmental regulation and technological innovation.The Porter hypothesis does not hold.(3)The market-inspired and command-controlled environmental regulations have different paths to capacity utilization.Market-inspired environmental regulation will indirectly affect capacity utilization through technological innovation,while command-controlled environmental regulation willdirectly affect capacity utilization,and there is no intermediary effect for technological innovation.