The Influence Of Environmental Regulation On The Development Of The Environmental Industry Based On Empirical Study

In recent years, China has been a period of rapid economic growth, but inaccordance with the law of economic development mode, it is still difficult to get ridof the traditional path of industrialization such as Europe and other developedcountries, the contradicion between the environmental constraints and thedevelopment of economy is growing. As the voice of the world, the environmentalprotection, and the reduction of pollution emissions growing,China as a developingcountry must also take the initiative to undertake the task of energy conservation,which makes China into the dilemma between rapid economic advance andimprovement of environmental quality, the continuous development of environmentalregulation is to solve the contradiction. Meanwhile, environmental industry’sinfluence on the harmonious development of enviroment and economy is growing.However, it is to be studied what environmental regulation impact on the developmentof environmental protection industry.This paper adopts input and output of environmental regulation to build acomprehensive index system of environmental regulation, principal componentanalysis, to measures the environmental regulation comprehensive index from2001to2012of each regions. The results show that China’s regional environmental regulationcomprehensive indicator showed significant regional imbalances, eastern region is thehighest, the central region is second, and the western region is the weakest. Then,from market demand and barriers of entry studied environmental regulation’sinfluence on the market structure of environmental industry, from enterprise behaviorand technological innovation to study the environmental regulation’s influence on themarket behavior of environmental industry, and from technological progress andproductivity to study environmental regulation’s effect on the market performance ofenvironmental industry.Then, we combined regional differences, such as environmental quality, energyefficiency, technological innovation and trade openness, by generalized least squares(GLS) and quantile regression (QR), studied environmental regulation’s effect on thedevelopment of environmental industry and environmental protection investment,the results showed that environmental regulation promote environmental protectionindustry and environmental investment, but it existed regional differences, which was due to imbalance development and regional condition’s differences. Finally, weconcluded the corresponding policy recommendations from the implementation ofenvironmental regulation efficiency and industrial structure adjustment based on theconclusion of the empirical analysis.