Research Of China’s Environmental Protection Industry Competitiveness Based On The "Diamond Model"

The environmental protection industry, one of seven strategic emerging industries, has been quickly developing for years. Reference to international experience, the promotion of environmental protection industry competitiveness is crucial to China. However, domestic academics’ research about the industry is limited. Most of existing research uses simple index to evaluate environmental protection industry competitiveness, that cannot form a comprehensive evaluation system. Meanwhile, that is significantly different from other industries’ competitiveness evaluation. It is not conducive to comparative study.Based on bibliographic, this article organizes the general theory about industry competitiveness and summarizes the competitiveness evaluation system of different industries, then selects the Porter’s diamond model as the basic of environmental protection industry competitiveness evaluation system. The secondary indexes are chosen by the features of environmental protection industry. As a result, this paper forms a concrete proposal of environmental protection industry competitiveness evaluation system.This paper chooses 35 listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange as the representatives of China’s environmental protection industry. Datum are collected from the annual reports of these sample firms. This article uses 13 indexes as the representation influences of environmental protection industry competitiveness, and then makes an empirical analysis by factors analysis. The empirical results show that six common factors, scale factor, business factor, downstream industrial chain support factor, government support factor, technology factor, and upstream industrial chain support factor, influence China’s environmental protection industry competitiveness. These six common factors have 86.86% variance contribution, that means the model is valid.The empirical results indicate that China’s environmental protection industry competitiveness is most influenced by scale factor, which has 32.85% variance contribution. The component matrix shows that the factor encompasses the resource sourcing ability of one company and the market size. Besides, the expanding ability and profitability efficiency both influence China’s environmental protection industry competitiveness obviously. At present stage, downstream industrial chain support factor, government support factor, technology factor, and upstream industrial support factor have similar impact to China’s environmental protection industry competitiveness.Based on component score coefficient matrix, the author compares and evaluates the comprehensive competitiveness of four sub-industries of environmental protection industry. It turns out that the water treatment industry has highest competitiveness. The after order is the solid waste treatment industry, the gas treatment industry, and the environmental monitoring industry. The empirical result of comprehensive factor score accords to the current situation of China’s environmental protection industry competitiveness. It suggests that the environmental protection industry evaluation system in this paper is effective.Finally, this article makes policy suggestions on enhancing the China’s environmental protection industry competitiveness in the light of empirical results, which includes stimulating environmental protection market demands, leading resource to gather in environmental protection industry, cultivate more excellent entrepreneurs, and so on.