Business Environment Optimization，Dual Relationships and Enterprises’ Capacity Utilization

Liu Jun, Fu Jiandong

Journal of Shanghai University of Finance and Economics Vol. 21, Issue 04, pp. 70 - 89 (2019)  DOI:10.16538/j.cnki.jsufe.2019.04.006

Summary

In the process of capacity utilization improvement, the business environment which enterprises are faced plays an absolutely vital role. Based on the perspectives of the business relationship and the government-enterprise relationship, this paper examines the real effects and internal mechanisms of business environment optimization on enterprises’ capacity utilization, and further depicts the heterogeneity of them from the dimension of the enterprise type and the regional characteristic. Through the theoretical analysis of the effects and internal mechanisms, and the construction of the business environment index at the enterprise level, the empirical test is carried out by using the survey data of Chinese enterprises provided by the World Bank. The results are as follows: Business environment optimization can improve enterprises’ capacity utilization; the internal mechanism is that business environment optimization improves the business relationship and the government-enterprise relationship faced by enterprises, thereby promoting enterprises’ capacity utilization; in the marginal effect, the marginal effect of improving the government-enterprise relationship to promote enterprises’ capacity utilization is greater than that of improving the business relationship, and in the business relationship, the marginal effect of improving enterprises’ relationship with downstream customers to promote enterprises’ capacity utilization is greater than that of improving the relationship with upstream suppliers. After further studies on the heterogeneity performance, this paper finds that, in the dimension of the enterprise type, the above effects and internal mechanisms exist in private enterprises and large-scale enterprises, but they do not exist in state-owned enterprises, and small and medium-scale enterprises can only by improving the business relationship to promote their capacity utilization. In the dimension of the industry characteristic, the above effects and internal mechanisms exist in the non-overcapacity industry, and business environment optimization in the overcapacity industry can only by improving the government-enterprise relationship and the relationship with downstream customers to promote enterprises’ capacity utilization. In the dimension of the regional characteristic, enterprises in coastal areas have the above effects and internal mechanisms, while in inland areas, business environment optimization can only by improving the government-enterprise relationship and the relationship with downstream customers to promote enterprises’ capacity utilization. Therefore, during the economic transition period, China needs more concentration on the improvement of the government-enterprise relationship to resolve the domestic surplus capacity in the process of optimizing the business environment. Meanwhile, the emphasis of government services and supports should be shifted from state-owned enterprises, large-scale enterprises, non-overcapacity industries and enterprises in coastal areas to private enterprises, small and medium-scale enterprises, overcapacity enterprises and enterprises in inland areas.

Keywords

business environment; capacity utilization; government-enterprise relationship; business relationship; overcapacity