The Effects Of Environmental Regulation On Economic Development In Western China

In order to avoid vicious economic development which pollute environment, the government began to implement a series of environmental regulation policies. Environmental regulation is beneficial to reduce the pollution of the environment in the process of economic development, but it is likely to slow down economic development, and those policies have an influence on the optimization and upgrading of industrial structure. The implementation of environmental regulation has direct effect to enterprise production cost, so the competitiveness of the enterprises is also affected by environmental regulation policies. At present, the domestic and foreign researchers have more research results in this study, not only put forward a "compliance costs" and "porter hypothesis", there are a lot of empirical analysis. Those people who support "compliance costs" believe that Environmental regulation is not conducive to economic growth, and it will hinder the economic development speed. In contrast, porter hypothesis insist that technical improvement and innovation is the key element to the enterprise competitive advantage.Environmental regulation policies make the enterprise have an incentive to conduct technology innovation and make efficient use of production resources. To get the conclusion, Potter and his supporters made a large amount of case analysis, but many researchers doubt porter hypothesis.According to the actual situation of the western region, compared with eastern and central, environmental regulation intensity is low, a lot of relevant environmental regulation policy is developed later than the east, and there are many problems in the process of performing those policies. Even so, with the rapid economic development of the western region, formulating and implementing environmental regulation policy is becoming more and more strictly. Understanding the influence of environmental regulation on economic growth and the influence degree, we can develop more effective environmental regulation policy. This is a major purpose of this article.In this paper, on the basis of reference literature, from the perspective of macroscopic to microcosmic, it studies the relationship between the implementation of environmental regulation in the western region and economic growth, industrial structure and enterprise competitiveness. During the study, this paper does the detailed systematic theoretical analysis, and uses the panel model for empirical analysis based on the theoretical analysis. This paper introduces multiple intermediate variables to specify the problem, and uses more theory and methods, such as the economic growth theory, game theory, environmental Kuznets curve, and so on. In the end, the main conclusions are:(1)The paper studies how the environmental regulation influences the western regional economic growth. This paper argues that the implementation of environmental regulation in the short-term could suppress technology innovation. Due to the implementation of environmental regulation in the western region, enterprise production cost increased, the change of the cost structure is likely to make the western enterprises lack human resources and funds for research and development production technology. In order to maintain profitability, some enterprises are also likely to cut the money for technology research and development. But in the long run, in order to satisfy green consumer demand and meet the green standards promulgated by the government, some enterprises adopt to clean technology, western companies have enough power develop cleaner production technology and modify the production process. Due to the implementation of environmental regulation, the investment structure change accordingly, and many enterprises will update fixed assets for adapting clean technology, therefore, environmental regulation will impact on capital accumulation; At last, many foreign capital enterprise bullish on resource advantage in the western regional, and invest in the west.Using the panel data econometric model and running the Eviews6.0software, the paper draws a conclusion that the level of environmental regulation in the western region at present is beneficial to increasing with a per capita GDP continuously, but it does not exist u-shaped relationship between the intensity of environmental regulation and economic growth in the western region.(2) In the fourth chapter, this article analyzes how environmental regulation impact on the industrial structure in the western region. In order to implement environmental regulation, related industrial policy will be layout, the government would adjust the western area industrial structure, and develop the third industry which is pollution-free and low energy consumption, and support the development of new energy industry. All will affect the industrial structure in the western region. On the other hand, the government does not subsidies pollution enterprises, and closes some pollution enterprises, thus some western companies exit polluting industries. Due to the implementation of environmental regulation, some western companies will become partner based on the ecological industry chain. Finally, environmental regulation will affect the demand for investment, after implementing environmental regulation, the project which will pollute environment is not approved.The paper uses the related data for the empirical analysis, it draws a conclusion that the strength of the current regulation is beneficial to optimize and upgrade industrial structure, and verifies the inverted u-shaped relationship between the industrial structure and environmental regulation. It shows that:the environmental regulation cannot be very strict in a short time in the western region, otherwise it will cause degradation of industrial structure.(3) In the fifth part of this chapter, the paper analyzes how the environmental regulation affects enterprise competitiveness. Then, using game theory in microeconomics, cost analysis and other methods, it comes to the conclusion that the influence of environmental regulation on the enterprise’s competitiveness depends on the strength of the enterprise itself and its environmental strategy. Enterprises that are Small scale will take corresponding negative coping strategies, or resistance, or taking the rent-seeking behavior. It is ultimately not conducive to the long-term development of the enterprise. And if enterprises take the positive strategy, those can achieve the sustainable development in the long-term. Then, by adapting porter’s analysis method, in the case of xinjiang tianye group, the part wants to explain that the enterprise will eventually realize win-win situation through the effective environmental management strategy and implementing clean production technology.The main innovation point of this article includes three aspects. Firstly, when studying the relation between economic growth and environmental regulation, this article illustrates that environmental regulation affect the intermediate variable, in turn, influence the economic growth mechanism by introducing intermediate variable, such as, technological progress, capital accumulation. Secondly, this paper analyzed how the environmental regulation affect enterprise exit, other literatures ignore the effects of environmental regulation on enterprise exit. Thirdly, this paper analyzes the behavior of enterprises when they face environmental regulation. It uses the rent-seeking theory and game theory to study rational action of enterprises, and the game theory model illustrates the realistic problems perfectly.In the study of relationship between environmental regulation and economic development, little literature does some related analyze for the regional environmental regulation. The vast western region is an important part in national economic development chain, so it has great realistic significance that my paper studies the relationship between environmental regulation and economic development in western China.