Can Heterogeneous Environmental Regulations Enhance the Capacity Utilization of Steel Enterprises? The Moderating Role of Government Subsidies and Political Embeddedness

Environmental regulations have been widely employed for the improvement of industrial capacity utilization, especially in steel enterprises. Using panel data from Chinese A-share listed steel enterprises (2011–2021), this study examines the impact of heterogeneous environmental regulations on capacity utilization. Key findings indicate that Command-and-control environmental regulations (CER) and market-incentive environmental regulations (MER) positively influence capacity utilization, whereas informal environmental regulations (IER) have a negative effect on it. Furthermore, government subsidies and political embeddedness serve as distinct moderating factors in this relationship. This paper enriches the literature on environmental regulation and capacity utilization from the perspective of an internal-external linkage perspective, providing insights for policymakers on sustainable green transition.