Research On The Impact Of Environmental Regulation On The Transformation And Upgrading Of China’s Manufacturing Industry

Green water and green mountains are golden mountains and silver mountains.Realizing the common development of economic development and environmental protection is the most important development goal of our country today.At present,the main component of my country’s economy is industry,and the manufacturing industry is the largest component of industry.Therefore,the development of high-speed and high-quality manufacturing industry has a very important guiding significance for my country’s economy.The rapid development of the manufacturing industry has promoted the rapid growth of my country’s economy on the one hand,and has brought many environmental problems on the other hand.The 19 th National Congress of the Communist Party of China stated that my country’s economic development situation has changed,and it is shifting from high-speed to high-quality development,which will promote economic transformation and upgrading.The implementation of the new green economic development concept is also imminent.At the same time,in order to protect the ecological environment,the country will inevitably increase environmental governance policies,which will inevitably affect the development of the manufacturing industry to a certain extent.At present,scholars at home and abroad have conducted extensive research on the impact of environmental regulations on the manufacturing industry,but the research is mainly about environmental regulations on the advancement of the manufacturing industry,and there is still relatively little research on the transformation and upgrading of the manufacturing industry.Environmental regulations directly or indirectly affect the transformation and upgrading of the manufacturing industry by influencing the cost,technology and other factors of the enterprise.In terms of cost,as the intensity of environmental regulations increases,the cost of enterprises will be increased at the beginning,thereby squeezing the use of enterprise technology investment funds,and then having a negative effect on the transformation and upgrading of the manufacturing industry.However,as the intensity further increases,the substantial increase in enterprise costs will encourage enterprises to carry out technological innovation,thereby improving enterprise efficiency,and playing a positive role in the transformation and upgrading of the manufacturing industry.On the demand side,with the increase in the intensity of environmental regulations,the development of polluting enterprises has been inhibited,and the development of clean enterprises has been promoted,thereby promoting the overall transformation and upgrading of enterprises.In terms of foreign direct investment,on the one hand,foreign investment funds will produce technology spillover effects under the incentives of environmental regulations to promote the transformation and upgrading of the manufacturing industry.On the other hand,as the intensity of environmental regulations increases and the investment costs of foreign-funded enterprises in my country increase,the advantages of my country’s manufacturing industry in international competition will decrease,which is not conducive to the development,transformation and upgrading of my country’s manufacturing industry.Based on the panel data of 30 provinces and 27 manufacturing industries in my country from 2006 to 2018,this paper establishes manufacturing transformation and upgrading indicators from the perspectives of inter-industry upgrading and intra-industry upgrading.The panel model,fixed effect model,random effect model and spatial Durbin model are constructed to empirically test the impact of environmental regulation on the transformation and upgrading of my country’s manufacturing industry.The research shows: First,in terms of the upgrading between manufacturing industries,without considering the spatial effect,the impact of environmental regulations on the transformation and upgrading of China’s manufacturing industries is in an inverted "U" shape,that is,as the intensity of environmental regulations increases,the manufacturing industry inter-industry transformation and upgrading manifested as an increase first and then a decline.China’s eastern,central and western environmental regulations have obvious differences in the impact coefficients of manufacturing transformation and upgrading.They have regional characteristics.The eastern and central regions have an inverted "U" shape,and the western region has a "U" shape,each region has its own optimal range of environmental regulation intensity,when considering spatial effects,the direct,indirect and total effect coefficients of environmental regulation are all positive and significant,indicating environmental regulations in this region play a positive role in the transformation and upgrading of manufacturing industries in this region and neighboring regions.Environmental regulations can be used as a driving force to promote the upgrading of China’s manufacturing industry to a certain extent.Second,from the perspective of the upgrading of the manufacturing industry,the impact of environmental regulations on the upgrading of the internal structure of my country’s manufacturing industry is shown as a “U” shape.From the perspective of the industry,the transformation and upgrading of the manufacturing industry is examined.The impact coefficients of environmental regulations on the upgrading of high-tech and low-tech industries are quite different,with industry heterogeneity.High-tech industries have a "U" shape,and low-tech industries have an inverted "U" shape.Each industry has its own optimal environmental regulation intensity range.Therefore,the government should implement different environmental regulation policies based on the development characteristics of regions and industries to promote the transformation and upgrading of China’s manufacturing industry.