Research On The Relationship Between Downstream Environmental Regulation And Upstream Enterprises' Capacity Utilization Rate

For a long time,China's economy has been growing steadily,but in recent years it has been plagued by two major problems:one is environmental pollution,the other is overcapacity.Among them,the problems is most common and serious in the manufacturing industry.Raw material industries,such as steel,cement,glass and metal smelting,are truly "double serious"industries coexisting with serious environmental pollution and serious overcapacity,which greatly restrict the transformation and upgrading of China's manufacturing industry and the healthy development of the economy.In fact,environmental pollution and overcapacity are two aspects of a problem,which are closely related.Environmental regulation plays an important role in controlling the upstream"double serious" industries of manufacturing industry as well as restraining the downstream pollution industry.Downstream as an important demand market for upstream,it's environmental regulation must have an impact on upstream overcapacity industries.Therefore,with the increasingly close links between upstream and downstream industries,it is not only of great theoretical significance to clarify how downstream environmental regulation affects upstream enterprises' capacity utilization rate and its internal transmission mechanism,but also has great practical significance in the current supply-side reform.Therefore,based on the data of China's industrial enterprises database and input-output table,this paper studies the impact of downstream environmental regulation intensity on the capacity utilization rate of upstream enterprises from the perspective of vertical industrial chain.It provides a theoretical reference basis for the environmental regulation to regulate the capacity of enterprises from the demand side,and it also provides policy references for the government to adopt more flexible supply constraints and demand-driven environmental protection policies to tackle the problem of overcapacity in manufacturing industry.Then,by adding cross-multiplier of upstream enterprise's product innovation,the specific transmission mechanism of the two is explored in depth.Finally,on this basis,we distinguish the differences of ownership and geographical location of enterprises,and observe the heterogeneity of transmission mechanism.The results show that:firstly,the relationship between downstream environmental regulation intensity and upstream enterprise Capacity utilization rate is U-shaped,that is,downstream environmental regulation intensity must reach a certain level,which can improve upstream enterprise's capacity utilization rate.Secondly,utilizing the regulation function of market demand,downstream environmental regulation can improve the capacity utilization rate of upstream enterprises by forcing upstream enterprises to innovate products.Thirdly,this"innovation promotion effect" is mainly reflected in the upstream non-state-owned enterprises and upstream eastern enterprises.Therefore,strengthening the environmental regulation level of downstream industries,activating and giving full play to the innovation vitality and innovation advantages of upstream enterprises,especially non-state-owned enterprises and eastern and western enterprises,will be the "Panacea" for improving enterprise's capacity utilization rate from the perspective of the vertical industrial chain.