The Relations Study On Environmental Regulation And Green Total Factor Productivity Of China’s Manufacturing Industry

China’s economy has been keeping developing in a rapid pace since the reform and opening up. As a leading component of national economy, the manufacturing industry has maintained a high growth rate and gained a big success. However,manufacturing’s input-based growth mode is being stretched to the limit while facing dual pressure of resource exhaustion and serious environmental pollution. In this context, China’s manufacturing needs to accelerate economic transition urgently and take the new road of industrialization, which can keep the economic growth while protecting the resources and environment as well. The key to all these problems is to transfer the economic development mode and improve the total factor productivity of manufacturing industry.As the resources and environmental problems become increasingly serious,more and more studies try to consider these two factors while studying economic growth and total factor productivity. Therefore, in order to measure the total factor productivity of China’s manufacturing more scientifically and accurately, this thesis will firstly apply DEA-based Malmquist index method to examine the traditional total factor productivity and green total factor productivity putting resources and environmental constraints into accounting framework in a sample of 28 China’s manufacturing branches over the period 2001 to 2011. Then it aims to explore the possibility to improve green total factor productivity using environmental regulation ways after conducting empirical analysis on the relationship between environmental regulation intensity and manufacturing green total factor productivity growth. Finally,according to the study conclusion, this paper will provide policy recommendations for China’s manufacturing green total factor productivity growth and economic transformation.In this paper, it mainly has two key points. Firstly, it combines the directionaldistance function based Malmquist model and data envelopment analysis(DEA)method together, to measure China’s manufacturing green total factor productivity while accounting for resources and environmental issues. It takes both environmental protection and economic development into consideration and makes the result more comprehensive. Secondly, the further relationship study on environmental regulation intensity and green total factor productivity verifies the existence of Potter Hypothesis in China, which means the reasonable environmental regulation can achieve a win-win situation of economic efficiency and environmental benefits. By this way, the paper can provide both theory evidence and empirical support for the formulation of environmental regulation policies in China.