Online Sales and Capacity Utilization Rate

Yang Liu, Yanxiang Xie and Xuanming Wang

Emerging Markets Finance and Trade, 2025, vol. 61, issue 11, 3532-3550

Abstract: Online sales, as an innovative business model, has become an effective tool to continue to drive the growth of emerging industries and enhance production performance. Using online sales data from listed Chinese enterprises from 2015–2020, we explore how online sales affect firm’s capacity utilization rate. It was found that: (1) The online sales significantly improves firms’ capacity utilization rate. (2) Online sales can improve firms’ capacity utilization rate by information governance mechanism and resource optimization mechanism. The mechanism of the information governance strengthen supervision and management optimization. The resource optimization mechanism improves competitiveness and increases flexibility. (3) The capacity utilization enhancement effect of online sales is more noticeable for small-scale, non-state, non-high-tech, and manufacturing enterprises. (4) Improved capacity utilization rate in the online sales model contributes to higher firm value and operating performance, with negative industry spillovers validating Schumpeter‘s (1912) theory of “creative destruction.” Overall, our study provides theoretical and empirical explanations for opening the “black box” of the mechanism of online sales mode in the context of the development of digital economy, and finds empirical support for better promoting enterprises to carry out online sales.

Date: 2025
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DOI: 10.1080/1540496X.2025.2488217

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