The Impact Of Environmental Regulation On China’s Industrial Agglomeration

With the increase of human economic activities, the damage to the environment is intensified. In order to govern the environment and protect the country from the environmental pollution, the government starts to formulate the corresponding environmental regulation policies. The industrial agglomeration can effectively promote the regional economic growth; therefore, the government and scholars are also actively seeking for the methods of promoting the industrial agglomeration to further upgrade. Currently, some scholars consider that the existence of the environmental regulation may leads to the industrial transfer; therefore, this paper tries to analyze the influence mechanism of the environmental regulation to the industrial agglomeration, and provide decision-making reference for policy makers.Based on the industrial agglomeration correlation theories and the environmental regulation correlation theories, this paper builds the influence mechanism of the environmental regulation and the industrial agglomeration. Starting form a micro perspective, it considers that the government shall improve the environmental regulation intensity, control the price of pollution type production factors by adopting the administrative intervention measures, and compulsively levy the pollution tax of the pollution type enterprises to promote enterprises to increase the investment of pollution treatment or reduce their own pollution discharge through improving the way of production technology. When the production cost and the technology upgrade surpass enterprises’ competence scope, enterprises will reduce the operation pressure to enterprises brought by the environmental regulation through adopting the way of industrial transfer; therefore, the phenomenon of the pollution industries’ further agglomeration or transferring to the areas of relative loose environmental regulation will occur.Meanwhile, it builds the theoretical model on this basis. It assumes that there are two districts of A and B in an economic entity, and it possesses a large number of homogeneous manufactures, producing cleaning type products and pollution type products. With the promotion of A district’s intensity of environmental regulation, the production operation of enterprises of A district will face three different situations.Situation One: accepting the increase of production cost. When improving theenvironmental regulation, it needs to increase the pollution treatment cost; if enterprises’ profit is ?1?0, enterprises will change the production decision.Therefore, it comes to Situation Two: improving production technology and improving the degree of cleanliness of the pollution type products. Because the cleaning type products are less influenced by the environmental regulation, enterprises need to improve their production technology in order to guarantee profits and improve the degree of cleanliness of the pollution type products; at this time, if the manufacturers’ profit is ?2 ??1, the optimal choice will be improving enterprises’ production technology; if ?2 ??1, enterprises will change the production decision because of unbearable. Therefore, it comes to Situation Three: enterprises choose the industry transfer, transferring to the areas of the relative loose environmental regulation.Since the 1970 s, our country has paid attention to the construction of the legal supervision and law enforcement ability of the environmental protection areas. After years of unremitting efforts, some fields have achieved initial success. Industrial discharge pollution intensity has decreased year by year, and the discharge of the industrial “three wastes” is effectively controlled. From 2003 to 2013, the significant agglomeration phenomenon existed in our country’s industry, but the industry overall agglomeration level started to decline, and among which, the industry agglomeration degree of capital type and labor type declined significantly. The degree of specialization of each area’s industry also changed. In recent years, the industrial overall agglomeration level of the eastern region which takes the high technology industry and the labor-intensive industry as the leading industries has declined; in recent years, the resource type industry agglomeration degree of the northeast and central regions which take resource and capital industries as the leading industries has been improved, and among which, the technology type industry agglomeration level of the central region has also been improved; in recent years, the resource type industry agglomeration level in the western region which takes the resource type industry as the leading industry has been further improved.Based on our country’s current situation, this paper verifies the influence of the environmental regulation to our country’s industrial agglomeration by adopting the method of empirical analysis and taking the influence mechanism analysis of the environmental regulation which is built by this paper to the industrial agglomerationas the premise. In consideration of the fact that as time goes on, our country’s each region’s economic development level and industrial pollution discharge intensity will change; therefore, using the threshold panel model for reference, it builds the threshold panel data model of the industrial agglomeration of the environmental regulation to our country’s 31 provinces under different economic development levels and different industrial discharge pollution intensities. According to the model results’ analysis, influenced by different economic development levels and different industrial discharge pollution intensities, the effect of the environmental regulation to the industrial agglomeration is inconformity. When the per capita GDP is less than 8750 yuan, the improvement of the environmental regulation will promote the regional industrial agglomeration. When the per capita gross regional product is greater than8750 yuan but less than 67390 yuan, the improvement of the environmental regulation will promote the regional industrial dispersion. When the per capita gross regional product is greater than 67390 yuan, the improvement of the environmental regulation will further promote the acceleration of the regional industrial dispersion. Using the industrial discharge pollution intensity as reference, when the industrial discharge pollution degree is less than 3.843, the improvement of the environmental regulation will promote the industrial agglomeration’s dispersion. When the industrial discharge pollution degree is greater than 3.843, the improvement of the environmental regulation will promote the further increase of the industrial agglomeration degree.Accordingly, the influence background of the environmental regulation to the industrial agglomeration can be divided into four states, which respectively are the state of both high economic development level and low pollution, the state of both middle economic development level and low pollution, the state of both middle economic development level and high pollution, and the state of both low economic development level and high pollution.Currently, our country’s Beijing, Tianjin, Shanghai, Jiangsu, and Zhejiang are at the state of both high economic development level and low pollution, and the improvement of these areas’ environmental regulation will lead to these areas’ industrial dispersion. Inner Mongolia, Liaoning, Jilin, Heilongjiang, Anhui, Fujian,Shandong, Henan, Hubei, Guangdong, Chongqing, Sichuan, Tibet, and Shaanxi are at the state of both middle economic development level and low pollution, and the improvement of these areas’ environmental regulation will lead to these areas’ industrial dispersion, but the industrial dispersion speed is slower than Beijing, Tianjin,Shanghai, Jiangsu, and Zhejiang. Hebei, Shanxi, Jiangxi, Guangxi, Hainan, Guizhou,Yunnan, Gansu, Qinghai, Ningxia, Xinjiang are at the state of both middle economic development level and high pollution, and the influence of the improvement of these areas’ environmental regulation to these areas’ industrial agglomeration is determined by the growth of these areas’ economic development level and these areas’ pollution levels. If the economic development level of these areas is further improved and these areas’ pollution degree tends to be better, the improvement of the environmental regulation will lead to the decline of these areas’ industrial agglomeration degree. If the economic development level is stagnant and these areas’ pollution degree is deteriorated, the improvement of the environmental regulation will improve these areas’ industrial agglomeration degree.According to the above theories and empirical analysis results and combing with our country’s current situation, this paper puts forward the policy suggestions of implementing the differentiation environmental regulation to speed up the formation and upgrade of the industrial agglomeration, reasonably carrying out policies support to the underdeveloped areas to promote the improvement of ecological environment,and creating the industrial development environment which is beneficial for agglomeration to ease the industrial dispersion pressure of the environmental regulation.