Research On The Influence And Mechanism Of Environmental Regulation On Industrial Transformation And Upgrading

The report of the 19 th National Congress of the Communist Party of China clearly stated that “China’s economy has shifted from a stage of high-speed growth to a stage of high-quality development”.The government calls for shifting from the pursuit of“gold and silver mountains” to “clear waters and green mountains”.Therefore,how to coordinate environmental protection and economic growth has been widely concerned and discussed.Environmental regulation is an important policy tool to govern and improve the environment.Some implementing local officials believe that environmental governance should be at the expense of economic growth,so they do not fully implement environmental regulations.In order to enhance the enthusiasm of local governments to implement environmental regulations,the “Eleventh Five-Year Plan for National Environmental Protection” implemented the environmental protection target responsibility system for the first time.Specifically,the central government sets pollution reduction targets nationwide and incorporates emission reduction performance into the local government’s performance appraisal system.Since then,the National Environmental Protection “Twelfth Five-Year Plan”,National Environmental Protection “Thirteenth Five-Year Plan” and the “Environmental Protection Law Amendment” have all continued the environmental protection target responsibility system and further improved the performance evaluation implementation evaluation system.Theoretically,the development of the industry determines the total economic volume,and the energy consumption of the industry,its scale and structure also affect the emission of pollutants.Therefore,industrial transformation and upgrading is the key path for high-quality development that coordinates environmental protection and economic growth.Therefore,it is of great significance to explore the role of environmental regulation in industrial transformation and upgrading and its transmission mechanism for solving the doubts of local governments,optimizing the implementation of environmental regulation and accelerating the realization of highquality economic development in China.Based on the above background,this paper discusses the impact and mechanism of environmental regulation on industrial transformation and upgrading from the perspectives of inter-industry and intra-industry.This paper attempts to address the following questions: What impact does China’s environmental regulation have on the transformation and upgrading of the three industries? Are “Porter Hypothesis” and“Pollution Refugee Hypothesis” applicable when environmental regulation affects industrial transformation and upgrading? As China’s environmental regulations continue to increase,how will stricter environmental regulations affect the transformation and upgrading of industries or services? What is the transmission mechanism? For the three industries as a whole,industry or service industry,how can we continue to play the role of environmental regulation in promoting industrial transformation and upgrading in the future?In order to solve the above research problems,the research logic of this paper is as follows: based on the perspective of inter-industry,this paper analyzes the impact of environmental regulation on the transformation and upgrading of the overall three industries.Specifically,the existing research has problems such as inaccurate environmental regulation indicators,obvious endogeneity,and more attention to industrial composition.This paper constructs indicators of environmental regulation intensity from the content of the local government work report,combines the industrial composition and the production efficiency of each industry(including total factor productivity and labor productivity)measure industrial transformation and upgrading and analyze the role of the two mechanisms corresponding to the “Porter Hypothesis”and the “Pollution Refugee Hypothesis”.Secondly,since industrial transformation and upgrading is very important in promoting the high-quality development of China’s economy and China’s environmental regulations are becoming more strict,this paper analyzes the impact and mechanism of environmental protection target responsibility system,a stricter environmental policy,on industrial transformation and upgrading and analyzes the regional,industry and enterprise heterogeneity of the effect of the environmental policy.Third,some scholars have found that environmental regulation will increase the proportion of the service industry in the total economic scale,but there is a lack of in-depth research.The continuous expansion of the output scale of the service industry may form a “cost disease” of the service industry,which will eventually drag down the overall economic growth.To avoid this problem,this paper focuses on the service industry from an intra-industry perspective.Specifically,this paper studies the impact and transmission mechanism of environmental protection target responsibility system,a representative environmental policy,on the transformation and upgrading of the service industry along the lines of environmental regulation—industrial development—transformation and upgrading of the service industry.In addition,this paper discusses the heterogeneity of the effect of environmental protection target responsibility system from two aspects: region and city level.Finally,innovation is a long-term mechanism to play the role of environmental regulation in promoting industrial transformation and upgrading,whether it is for the three industries as a whole or the industry or service industry.Green innovation is a key factor in reconciling economic growth with environmental protection.This paper studies the impact of environmental target responsibility system on the quantity and quality of corporate green innovation.In addition,this paper comprehensively analyzes the green innovation motives of different enterprises when faced with this environmental policy from the horizontal and vertical characteristics,so as to provide a reference for the optimization and precise implementation of environmental regulations.The main findings of this study are as follows:First,environmental regulation first promotes and then inhibits the transformation and upgrading of the whole three industries.Environmental regulation enables enterprises to adopt innovation or migration behavior to affect output structure and production efficiency,thereby affecting industrial transformation and upgrading.Specifically,environmental regulation promotes innovation and the transfer of polluting industries.As the degree of innovation increases,the impact of environmental regulation on industrial transformation and upgrading changes from inhibition to promotion.With the change of polluting industries from transferring out to transferring in,the effect of environmental regulation on industrial transformation and upgrading has changed from positive to negative.In general,although the industrial transfer mechanism plays a leading role,the innovation mechanism is the key to continuously promoting industrial transformation and upgrading by environmental regulations in the future.In addition,the effects of punitive environmental regulation and preventive environmental regulation on industrial transformation and upgrading are non-linear,that is,an inverted “U” shape.The preventive environmental regulation of local government environmental protection financial expenditure can quickly and significantly promote the transformation and upgrading of the industry,and the punitive environmental regulation with wide coverage,such as the pollution discharge fee,has a longer-lasting effect on the promotion of industrial transformation and upgrading.Second,the environmental protection target responsibility system,a stricter command-and-control environmental regulation,has significantly promoted the transformation and upgrading of industrial enterprises.The role of this environmental policy varies with the characteristics of regions,industries and enterprises.Government and market demand are the two key regional factors.The transformation of government governance and the green preference of the market will magnify the positive impact of environmental regulation on industrial transformation and upgrading.The promotion effect of environmental regulation on industrial transformation and upgrading only occurs in industries with high pollution intensity and high degree of competition.This positive effect is more significant in companies with a long history,large scale,and low capital density.Finally,the environmental protection target responsibility system mainly promotes the transformation and upgrading of industrial enterprises by improving the efficiency of resource allocation within and between enterprises,and the positive role of the innovation mechanism has not been stimulated.Third,the environmental protection target responsibility system promotes the transformation and upgrading of the service industry by affecting industrial development.Specifically,industrial transformation and upgrading and industrial transfer are two strategies to deal with environmental regulation.Industrial transformation and upgrading positively affects the transformation and upgrading of the service industry through demand,while industrial transfer has a negative effect on the transformation and upgrading of the service industry through demand.After the implementation of the environmental protection target responsibility system,on the one hand,local government officials,driven by the dual goals of economic growth and environmental protection,will focus on guiding and cultivating the development of low-polluting technology-intensive industrial industries,which have created a large demand for producer services,thus driving the transformation and upgrading of the service industry.On the other hand,compared with non-state-owned enterprises,stateowned enterprises play a leading role in pollution reduction and have financial advantages,so non-state-owned enterprises tend to reduce production or withdraw from the market to deal with environmental regulations.Therefore,the environmental protection target responsibility system leads to the industrial output transfer from nonstate-owned enterprises to state-owned enterprises in the same industry,and the increase in income brought by the expansion of the output scale of state-owned enterprises increases the demand for life service products,and ultimately inhibits the transformation and upgrading of the service industry.Fourth,stricter environmental regulation,the environmental target responsibility system,not only significantly increases the quantity of corporate green innovations,but also significantly improves the quality of corporate green innovations.Although the environmental protection target responsibility system has significantly promoted the simultaneous improvement of the quantity and quality of inventive and practical green innovations,it has a relatively weak role in promoting inventive green innovations with higher technological content.In addition,the impact of environmental regulation on the quantity and quality of corporate green innovation is heterogeneous across industries and firms.For enterprises in polluting industries,local governments may resort to extreme measures in order to achieve emission reduction targets as soon as possible,thereby suppressing the enthusiasm of enterprises for green innovation.Companies in the cleaning industry are less constrained by environmental regulations and have the advantage of attracting external resources,so the environmental target responsibility system has significantly improved the quantity and quality of green innovations of these companies.Considering the differences in the horizontal and vertical characteristics of enterprises,the simultaneous improvement of the quantity and quality of green innovation by the environmental protection target responsibility system only occurs in state-owned enterprises or enterprises in the growth or mature stage.Based on these research conclusions,the policy recommendations to give full play to the continuous promotion of environmental regulation in industrial transformation and upgrading and to accelerate the high-quality development of China’s economy are as follows: First,increase the proportion of environmental performance in government promotion assessment to improve local government policy implementation force.In addition,big data should be used in the process of environmental monitoring and law enforcement to reduce the possibility of human manipulation of data,so as to provide a scientific basis for local government enforcement.Second,improve the supporting measures for environmental regulation from both the government and the market.Specifically,we can start from two aspects: accelerating the transformation of government governance and cultivating and expanding the green preference market.Third,we should supplement the shortcomings of the transmission mechanism according to local conditions,and release the positive effect of environmental regulation on industrial transformation and upgrading.For regions with a high proportion of industrial added value,the government should create an environment conducive to innovation or resource allocation.For regions with a relatively high proportion of the added value of the service industry,local governments should actively promote industrial transformation and upgrading,and release the pulling effect of industrial transformation and upgrading on the transformation and upgrading of the service industry.Fourth,implement environmental regulations precisely in combination with industry and enterprise characteristics.Local governments can increase the emission reduction target responsibility of industrial enterprises with long establishment time,large scale,low capital density and high pollution intensity,and appropriately relax the responsibility for emission reduction targets of industrial enterprises with relatively short establishment time,small scale,high capital density and high pollution intensity.Responsibility for emission reduction targets of small industrial enterprises.In addition,local governments should strengthen the application of market-based environmental regulations in polluting enterprises or non-state-owned enterprises,and empower these enterprises to choose environmental policies.