China, as a large developing country, faces a particularly serious problem of overcapacity [5]^[1]. Since the initial implementation of the reform and opening up policies, China’s economy has maintained high-speed growth. The total economic volume has reached second place in the world, and the scale of the manufacturing industry has expanded rapidly. However, the growth has slowed since the global financial crisis that began in 2008. At the same time, problems, related to economic growth, are gradually emerging. Among them, overcapacity is a prominent problem in the upgrading of China’s industrial structures and the development of improved efficiencies [6,7]^[2][3]. As China’s economy enters a new normal, the pressure to transform and upgrade its industrial structure has increased, the demographic dividend of economic development has disappeared, and structural imbalance has become increasingly serious, resulting in more and more serious overcapacity [8]^[4]. Therefore, it is urgent to find effective ways and means to bring the problem of overcapacity under control [9,10]^[5][6]. The cause of overcapacity is rooted in a lack of innovation. Meanwhile, reducing overcapacity is inseparable from improving technology innovation (TI). Through TI, enterprises can continuously improve their own core competitiveness and produce offers that meet the increasingly diversified needs of the market [11]^[7]. Therefore, TI has a significant impact on business performance [12]^[8] and can be viewed as a point of new economic growth that can help alleviate the excess capacities of enterprises.

China’s innovation capability has obvious regional differences [13]^[9]. The Yangtze River Economic Belt is located in the heartland of China and has obvious regional advantages. Since the initial implementation of the reform and opening up policy, the Yangtze River Economic Belt has enjoyed great advantages in terms of both comprehensive strength and strategic support, gradually populating the zone with the highest economic density, except for some coastal areas in China. In March 2014, Premier Li Keqiang proposed for the first time in the government work report that the construction of the Yangtze River Economic Belt should rely on the golden waterway and be treated as a national strategy. The stable development of the Yangtze River Economic Belt is conducive to the stable development of China’s overall economy. Existing researches on this specific region of the Yangtze River Economic Belt mostly focus on environmental carrying capacity [14]^[10], carbon emissions [15]^[11], green development [16]and so etcon. Although some literatures have also studied the production capacity of the Yangtze River Economic Belt, they focus on energy efficiency [17]^[13], and have not directly studied the CU problem in this region. Therefore, focusing on the capacity utilization of enterprises in the Yangtze River Economic Belt has certain theoretical significance for the study of China’s overcapacity problem.

2. Meeting Market Demand

Market demand is the most direct factor to determine the level of enterprise CU [24]^[14], representing an equilibrium mechanism of an enterprise’s capacity that automatically coordinates market supply and demand. The main reason for the occurrence of market surplus and the low CU is the backward technology employed and a lack of TI ability of enterprises [25^[15][16][17],26,27], which find it difficult to meet the market demand [28]^[18]. Therefore, an enterprise with strong innovation ability is more able to use its own products to meet the market demand, and then improve CU. First of all, TI generally appears on the basis of an enterprise’s ability to analyze market and identify market potential [29]^[19], while the level of such an ability is greatly enhanced by the technology innovativeness of the enterprise [25]^[15]. When market knowledge is combined with what the enterprise is technological capable of, a timely TI appears. Hence, TI helps an enterprise improve its CU. A potential market demand refers to a demand that is emerging, although it is not yet fully displayed by consumers and cannot be directly sensed by enterprises [21]^[20]. On the one hand, enterprises improve their market analysis and research ability based on its level of TI. By fully analyzing the current consumer demand, functionalities, usefulness, and other performance indicators of the available market offers, enterprises can measure the depth and scale of potential demand, and make relatively accurate judgment on the evolution of current market demand. This measurement and judgment provide enterprises with new technology research and development direction and production direction. For example, there is a serious overcapacity problem in China’s coal industry. Increasing TI can improve CU and effectively manage coal overcapacity [30]^[21]. Therefore, the improvement in TI can speed up the accurate identification of potential market demand, leading to the creation of products that meet the true needs of the market [31]^[22]. That in turn stimulates mass consumption and increase the market purchase volume. This, of course, helps improve the CU rate of enterprises. Secondly, enterprises upgrade their products through deploying new TI to meet the forever changing market demand. This, of course, improves enterprises’ CU. On the one hand, in the face of continuous demand or critical market demand, enterprises can quickly respond to the changing market demand by constantly carrying out TI, upgrading their existing technology and improving their existing products [32]^[23]. Through continuous TI, continuous improvement and innovative design and production of products, and exploration of other creative development paths, enterprises can continuously maintain their competitive advantage and increase their bases of loyal users. So, enterprises must improve their CU in order for them to better meet market demand. On the other hand, by upgrading low-end products through TI, enterprises can reduce low-end supply and increase high-end supply, so as to meet the high-end market demand and improve their CU. Relevant literature research has shown that missing TI is one of the important causes of the low-end product surplus in emerging economics, and also the root cause of the high-end supply shortage in these economies [33]^[24]. Through TI, enterprises can realize the development of new products and the transformation and upgrading of their prevalent technologies. Additionally, they can eliminate low-end and backward production capacities and improve high-end supply and demand; they not only avoid the occurrence of “homogenization” product problems by reducing the production of low-end products, but also acquire relatively fast access to the high-end product market through meeting the demand of the high-end market [34]^[25]. So, these enterprises’ utilization rate of production capacity can be improved.

3. Improving Production and Management Efficiency

By capacity utilization, it refers to the ratio of the actual output of an enterprise to its capacity [35]^[26]. Therefore, in the case of the same capacity, when the actual output of the enterprise is higher, its CU is also relatively higher. Through TI, enterprises can make their production and management more efficient through effectively coordinating different departments [36]^[27]. So, the efficiency of resource utilization is improved, leading to increased output and improved efficiency of CU. First of all, through TI, enterprises can optimize their management and promote the use efficiency of capital and labor, so they improve their production efficiency and promote the improvement of CU. TI can not only accelerate the transfer of knowledge to the production of consumable products, but also improve labor productivity and make capital investment more efficient in the process of technology search and information exchange [37]^[28]. So, TI helps enterprises achieve a constant, or even increased, output under the condition of saving factor investment. This is mainly because enterprises can promote the improvement of workers’ quality and skills through TI [38]^[29]. By promoting and applying new technology, enterprises will constantly put forward higher requirements for workers, while providing educational and technical trainings for employees. This, of course, improves their productivities [39]^[30]. On the other hand, TI generally makes the original production tools and production processes more efficient. For example, the application of intelligent equipment helps improve not only the quality of an enterprise’ products, but also the production efficiency of the firm [40]^[31]. So, TI promotes the improvement of CU. Secondly, through TI, enterprises can improve their managerial efficiency and optimize the systemic deployment of factors, leading to better utilization rate of capacities. On the one hand, in the process of production, it is necessary to combine land, labor, capital and other production factors in a specific and increasingly better way. Through TI, enterprises can organize and manage these production factors more scientifically, and upgrade the combined effects of the production factors more optimally. Hence, the enterprises’ organizational form and culture, managerial operations and quality can be upgraded [41]^[32]. By implementing advanced management concepts and innovatively upgrading prevalent production methods and organizational form and culture, the internal management of an enterprise can become more scientific and efficient. That is to say, TI helps improve the efficiency of enterprises’ managerial efficiency, optimize the more optimized combination of economic elements, and makes enterprises increasingly more efficient in their use of various economic elements and in their cooperation. In the context of increasingly severe environmental regulations, TI has become an important way for enterprises to increase output and improve CU [42,43]^[33][34]. On the other hand, when an enterprise overinvests in one way or another, it will naturally reduce its CU [44]^[35]. Through TI, enterprises optimize their management efficiency, inputs of production factors, and CU. For quite a long period of time, Chinese enterprises have adopted the approach of imitating innovation [45]^[36]. In terms of independent TI, there is still a large gap between the current Chinese level and the international advanced level. In order to quickly occupy markets while reducing business costs, enterprises tend to introduce complete sets of equipment. Although this approach can temporarily save time and cost, when the same technology is repeatedly introduced into different industrial sectors, similar products will be produced and entrepreneurial competitiveness will be mostly absent. When an enterprise pays attention to its own long-term benefits, it will naturally focus on improving its independent innovation ability. This will gradually help optimize the enterprise’s management, investment in necessary factors and in activities related to TI [46]^[37]. Other than relying on the introduction of low-end technology, it will avoid any pursuit of hot spots in low-end markets and reduce the production of similar products that are available in the market. So, TI can further improve the CU. That is to say, TI can improve the efficiency of enterprises’ management, optimize the systemic combination of economic elements and make the cooperation among them more efficient.

4. Optimizing Industrial Structure

TI can help transform industrial structures in the direction of high added value [47]^[38], and improve the total efficiency of resource use. Hence, it promotes the improvement of the CU of the entire industry. First of all, TI can regulate the allocation of production factors in the industry, and improve the utilization rate of production capacity. On the one hand, due to differences in technological bases and costs between enterprises and industries, the impact of TI on labor productivity and output efficiency varies from one industry to another, resulting in performance differences. Under the function of price mechanism, all production factors flow spontaneously to sectors with higher productivity [48]^[39]. So, enterprises with higher productivity through technology innovation will have more and convenient access to factors of production. On the other hand, an improvement in TI will improve the marginal productivity of each factor and change the relative costs of the factors. So, improving TI strengthens the coupling between economic output structure and factor input structure, promotes the development of the industry, optimizes the industrial structure, and consequently, improves CU. Secondly, TI drives the formation of new production methods and new industries. Thus, TI improves the utilization rate of production capacity. On the one hand, when the ability of TI in the overall industry continues to improve, it will force the relevant enterprises to carry out corresponding TI activities in order to follow the industrial trend and maintain a competitive advantage. Otherwise, the enterprises will be eliminated by the industrial evolution. Therefore, when each enterprise constantly carries out TI-related activities, the joint effort will further promote industrial development, and drive the emergence of new production methods and new products [49]^[40]. The emergence of new products effectively changes the market demand structure, resulting in the consequence that newly emerging products occupy a much wider range of the consumer market than any previously available product. At the same time, backward enterprises will be gradually replaced by enterprises that employ advanced technologies. As a consequence, the development of the entire industry will be promoted so that the industry and enterprise CU will be improved.