A Study Of The Effect Of Environmental Regulation On Structural Adjustment Of Manufacturing Industry

In 2016,former ministry issued the guidance about playing positive role of environmental protection on promoting the supply side promote structural reform.The guidance pointed out that we should realize the role of environmental protection on the supply side promote structural reform,promote actively promote the transformation and upgrading of economic structure,and improve the quality of economic development.In the boost policy of industrial structure adjustment,the key way to solve the dilemma is to play the full role of environmental regulation on industrial structure adjustment.The implication of environmental regulations have been enriched with the expand of types of environmental regulations and the proposal of informal environmental regulation.China’s manufacturing industry is at the middle low end of the value chain,and it is also the main body of energy consumption and pollution emissions facing the bottleneck period of transformation development.The adjustment of industrial structure is the superposition of the local upgrading of industrial structure and the transfer of industry.The level of economic and social development in coastal and inland regions is quite different which leads to the difference of environmental regulations.The differences in environmental regulation intensity provides opportunities for inter-regional transfer of polluting industries,and gradually form a pattern of local emission reduction and overall pollution diffusion and aggravation.The "porter hypothesis" and "pollution sanctuary hypothesis" are two theories that environmental regulation affects the decision-making behavior of enterprises.For polluting enterprises,local innovation and trans-regional transfer have substitution effects in reducing the cost of environmental governance.A large number of scholars have studied the two theories respectively and formed rich conclusions,but few studies have combined the two theories.Therefore,using panel data of 30 provinces of China,this paper divides environmental regulations into formal and informal,and conducts a comparative study on the upgrading of the industrial structure of manufacturing industry and the transfer of polluting industries in China’s coastal and inland regions.Firstly,the paper introduces the influence path of environmental regulation on industrial structure adjustment in coastal and inland regions,and puts forward the research hypothesis.Secondly,the influence of coastal and inland environmental regulations on technological innovation of manufacturing enterprises is analyzed.Thirdly,the paper further analyzes the difference of the impact of environmental regulation on the upgrading of manufacturing structure and industrial transfer in coastal and inland regions,and discusses the mediating role of technological innovation on the effect of environmental regulation on upgrading of manufacturing structure.Finally,the paper puts forward suggestions for the coastal and inland regions to formulate environmental regulations according to local conditions and realize the structural optimization and upgrading.In terms of the effect of environmental regulation on technological innovation,Based on the industrial heterogeneity,dividing environmental regulation into formal and informal environment regulation,it makes a comparative analysis of the impact of environmental regulation and industrial heterogeneity on manufacturing enterprises between coastal and inland regions through the provincial data in China from 2010 to 2015.The results show that:(1)From the perspective of whole industry,the impact of formal environmental regulation on technological innovation is significantly positive in both coastal and inland regions;informal environmental regulation has positive effect in coastal regions and is not significant in inland regions;environmental regulation intensity plays a significantly negative role in coastal regions but plays a significantly positive role in inland regions.(2)The effect of environmental regulation on technological innovation of high pollution industry is significantly positive in coastal regions but is significantly negative in inland regions.(3)The influence of environmental regulation on technological innovation of high relocation cost industry is significantly positive in coastal regions but is significantly negative in inland regions.In terms of the effect of environmental regulation on manufacturing industry structure,This paper studies the influence of environmental regulations on the adjustment of industrial structure of manufacturing industry based on the "porter hypothesis" and "pollution shelter hypothesis".Firstly,it theoretically analyzes how enterprises adjust their decisions to maximize profits when environmental regulations become stricter.Secondly,based on the provincial panel data from 2004 to 2016 in China,dividing environmental regulations into formal and informal environmental regulations,this paper makes an comparatively analysis on the effect of two types of environmental regulations on the adjustment of manufacturing industrial structure using the method of systematic GMM.The study finds that(1)Two types of environmental regulations have an inflection point in the industrial structure adjustment of the manufacturing industry.When crossing the inflection point,two types of environmental regulations can promote the industrial structure upgrading of the manufacturing industry and the transfer of polluting industries.(2)The effect of formal environmental regulation is better than that of the informal environmental regulation.The intensity of environmental regulation of coastal regions reaches an inflection point earlier than that of inland regions.(3)The technical innovation has a mediation effect on the relationship between two types of environmental regulations and industrial structural upgrading in coastal regions while not significant in inland regions.Most inland regions are still in the stage of undertaking coastal polluting industries and the existence of pollution shelters weakens the porter effect of environmental regulations promoting local upgrading.This paper is divided into seven parts.Chapter 1 is the introduction.Chapter 2 is the literature review.Chapter 3 is the theoretical research and research hypothesis.Chapter 4 is the empirical study on the impact of environmental regulation on innovation.Chapter 5 is the empirical study on the impact of environmental regulation on industrial structure adjustment of manufacturing industry.Chapter 6 is the part of policy suggestion.Chapter 7 is the conclusion and the research prospect.