Transformational Research on the Existing Traditional Manufacturing OEM Enterprises' Transformation Path under Excess Capacity: Quantitative Empirical Research Based on the Textile Printing and Dyeing Industry

China's state-owned enterprise (OEM) enterprises in textile printing and dyeing industry face persistent overcapacity and tightened environment protection regulation, and various small and middle OEMs are trapped in a dilemma of price taker (e.g. low bargaining power, narrow margins and lack of transformation momentum). The study collects data (for the years of 2010–2023) from China Industry Statistical Yearbook, China Environmental Statistical Yearbook, Wind database, constructs a panel and uses descriptive statistic, group comparison, correlation analysis and fixed-effects regression to check the logic of dropping the price competition game and entering the value competition game. The results demonstrate: (1) capacity utilization is highly and positively correlated with the profit rate, and overcapacity is a main factor for the drop in profit; (2)R&D intensity has a positive and significant effect on the company profit rate, but with a "transformation threshold effect", such as R&D transforming into profit only if the capacity utilization is more than about 0.70; (3) too large concentration of the customers decreases bargaining force and inhibits transformation; (4)moderate environmental regulation encourages upgrading and is consistent with Porter hypothesis. From the results above, the paper proposes a three-dimensional path for equipment iteration and process upgrade, customer structure optimization and migration toward value competition, which provides evidence for OEM enterprises' escape from "dilemma lock-in" and to regulators' designing policies based on issues, respectively.