| China has grown rapidly both in economic and national strength. Since Chinafound for60years, people’s living standards have been greatly improved. However, itshould not be ignored that with the rapid economic growth in China, the environmenthas been polluted seriously at the same time. It is not sustainable of this kind of pathof economic development at the expense of priceless resources and destroies hardlyunrecoverable enveriment. Therefore, it is really critical for China to choose asustainable way of economic development in which we can not only develop rapidlyand protect our valuable environment and achieve the economic andenvironmental "win-win" situation between economy and environment. However dueto the negative externalities of environmental pollution and the limited rationality, itcouldn’t only rely on the market mechanism to solve the problem but on theenvironmental regulation of government.Firstly, based on the existing paper on the construction of enterprise pollutionfunction, this paper constructs a function called“the function of the real pollutionemission of enterprise”. And based on the endogenous growth theory, this paperconstructs a mathematical model called” the capital allocation of enterprises tomaximize the profit under environmental regulation”. After that, we discuss threecircumstances, including the case without considering the environmental regulation,the case without considering the development of green manufacturing technology andthe general case, and in each case what the created direction the enterprise will chooseand how much capital the enterprise will invest in it in order to maximize the profitand develop sustainably. Through the analysis of the model we found that: faced withthe ever-increasing tension of environmental regulation, the enterprise would inputmore capital into the creation of green manufacturing technology rather than pollutioncontrol technology. On the consequence, the enterprise will not only produce moreproducts but also lower the amount of pollution. Besides that, we found that itpresents a reserved" U" type relation between the environmental regulation intensity and green production technology. Then, this paper takes advantage ofMalmquist-Luenberger productivity index to measure the total factor productivityefficiency and the green production technology development of30provinces of China.Finally, this paper costructed a econometric model in which the green manufacturingtechnology is regarded as the explained variable to testify the result of the theoreticalmodel. We found that with the environmental regulation intensity increasing, thecompany will input more capital into the process of green manufacturing technologycreation so that the green manufacturing technology progress rate will beshowinga downward trend after the first rise in eastern China, central China and northeastChina. But this kind of trend is not significant in west China. That’s may because thatthe economic development of the western region is relatively backward andthe environmental regulation intensity is consequently low and therefore theincentives of green manufacturing technology creation is deficiency.In summary, we hold the view that the government should increase the intensityof environmental regulation appropriately and formulate reasonable environmentalregulation policy. Only in this way can we build up a benign cycle mechanism toachieve the win-win situation of environmental protection and economic development.In addition, the government should establish system with differentiation targetedlybased on the characteristics of various industries and regions and make timelyadjustment according to the real situation of enterprises. |
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