Government Regulation,Market Volatility And Production

The production organization arrangement of enterprises is mainly manifested in output and production cycle.And the production organization arrangement of enterprises will be affected by both government regulation and market fluctuation.Understanding the law of the production organization arrangement of enterprises’micro-entities can help improve the governance of enterprises’ production capacity,so as to further optimize the formulation of macro-policies and promote the steady and healthy operation of the economic market.Therefore,the real data will reflect how government regulation and market fluctuations have concretely affected the production arrangements and decisions of enterprises,and how different enterprises will react;At the same time,since government regulation itself may cause market volatility,which may also lead to the introduction of policies.It is necessary to investigate how government regulation will affect the sensitivity of enterprise production to price under the same framework.This study tries to answer the above questions from a microscopic perspective.To be specific,based on cost management theory,Smith policy implementation process theory,externality theory and existing research results,a production model about compliance cost and market price under government supervision is established firstly by considering the two factors under the same framework.And then this study takes steel enterprises as representative samples using 2014-2019 high-frequency daily production data,daily price data and high-precision daily air quality and climate data,etc.to empirically study the influence of government regulation and market fluctuation on enterprise production adopting several econometric analysis methods such as RDiT and multidimensional fixed effect model.The main conclusions of this paper are as follows:(1)The established theoretical model reflects that the production of enterprises is influenced by the compliance cost brought by government regulation and the market price.And government regulation can theoretically change the price elasticity of production.(2)The price fluctuation of the product market is the basic factor of the enterprise’s production arrangement.The price of products that an enterprise mainly produces for sale on the market have a significant positive impact on the production,but the size of the impact is related to the production link in which the product is located.The positive and negative effects of the price of the direct upstream products of the main products of an enterprise on production depend on whether the enterprise simultaneously produces the direct upstream products.(3)The effect of seasonal government regulation is limited.The production schedule shows an obvious time trend,less production in the supervision and retaliatory production after the supervision because of high compliance cost.At the same time,the production of enterprises with certain environmental protection ability is less affected by the policy regulation,and the production of large-scale enterprises is more affected by the policy regulation than that of small-scale enterprises.(4)Government regulation will change the price sensitivity of enterprise production.The overall production of iron and steel enterprises lacks price elasticity.And enterprises regulated have higher price sensitivity.In addition,the production price elasticity of non-state-owned enterprises and downstream enterprises is more significantly affected by the policy supervision.The innovation of this paper mainly lies in two aspects.One is the innovation of the research content,which established a model of unilateral expected profit maximization for steel enterprises using to explain the production arrangement of enterprises under the joint influence of government regulation and market fluctuation.At the same time,this paper complements the existing theories with the empirical analysis and test of representative manufacturing enterprises.The roles of both in the production decision-making of enterprises are clarified,and the influence of government regulation on the production price elasticity of enterprises is clarified.The second is the innovation of sample selection,method application and variable setting,focusing on iron and steel enterprises with both market position and government supervision,adopting high-frequency and high-precision daily data,and using measurement methods that are more consistent with data characteristics and policy background.It can make the estimated result more similar to the causal inference,and more accurate.Based on the main conclusions of this paper,the following suggestions are put forward from the perspectives of policy,market and enterprise:(1)Optimize government supervision means and strengthen its guiding position;(2)Promote the orderly and healthy development of the market;(3)Strengthen the main role of enterprises.There is still room for further research in this paper.For example,theoretical analysis needs more in-depth discussion,and empirical analysis needs to explore more reasonable models and match more complete data to further test the causal relationship between variables and reduce estimation bias.