The Impact of Supply Chain Finance on Enterprises’ Capacity Utilization: An Empirical Study Based on A-Share Listed Manufacturing Companies

Abstract

Enhancing capacity utilization (CU, hereinafter referred to as CU) is crucial for effectively solving the overcapacity problem, optimizing industrial structure, and promoting premium economic development. While extensive academic research has been conducted on CU, supply chain finance (SCF, hereinafter referred to as SCF) and its influence on corporate capacity constraints remain largely unexplored. This study carefully examines how SCF affects corporate CU and the transmission mechanism, with a focus on China’s A-share listed businesses (2010–2023). The result shows that SCF improves businesses’ CU. After applying various robustness and endogeneity tests, the findings still hold that SCF largely affects the growth in CU throughby alleviating financing constraints, reducing internal agency costs, enhancing technological innovation, and improving inefficient investment. Further analysis indicates that close supply chain relationships, lower supply chain efficiency and non-state ownership, higher industry competition, a high marketization level, and a high level of financial development all enhance the “de-capacity” effect of SCF. Besides enriching the theoretical framework of SCF’s economic impacts, this research develops an operational solution to mitigate production overcapacity, a long-standing structural issue in China’s manufacturing industries, and provides a solid theoretical support for SCF to strengthen the foundation of the real economy and spearhead the sustainable, productivity-driven development of China’s economic landscape.