International Journal of Earth Sciences and Engineering

Chuan Lin ¹, Wei Chen ¹, Bai Yang ¹

Affiliations
1 Research Center for International Business and Economy, Sichuan International Studies University, Chongqing, CN

Abstract

Environmental constraints and capacity cooperation are two important issues faced by our economy. This paper has discussed the mutual promotion relationship between environmental regulation and capacity cooperation. Firstly, decompose the capacity utilization rate of industrial enterprises in China at production side and consumption side and then investigate the influencing degree of environmental regulation intensity and other factors on excellent production capacity with adoption of system GMM estimation method. The research has found out that phenomenon of lacking of capacity cooperation among industrial enterprises in China is very common as the supply of production side technical efficiency loss and consumption side is bigger than demand. The strengthening of environmental regulation intensity can improve the capacity cooperation obviously after controlling related factors. The effect of environmental regulation and capacity cooperation is the same at policy path; therefore, the government should strengthen environmental regulation intensity, include environmental pollution into enterprise production cost and phase out backward production capacity through market mechanism in way of capacity cooperation.

Keywords

Capacity Cooperation, Capacity Utilization Rate, Environmental Regulation, Dynamic Panel Model.

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