Does The Porter Hypothesis Apply To All Industries?

Almost all developed industrial countries have experienced the environmental degradation caused by the inappropriate pursuit of economy growth. China also stressed the importance of the transformation of economic development mode due to environmental issues have become increasingly prominent. Since the environment is a "public goods" and also have the negative externals features, in the case of ill-defined property rights, it can not be solved by the market, which means the need for government intervention. Neoclassical economics states that environmental policy will increase private production costs, and reduce the competitiveness of enterprises. It has a negative effect on economic development. However, Porter and other scholars believe that we can not separate environmental protection and economic development into two contradictory part. These scholars create and improve the "Porter Hypothesis". Based on "Porter Hypothesis", appropriate environmental regulation can stimulate the "motivation effect", which can compensate for the industry costs caused by "crowding out effect", promoting technological innovation. Since "Porter Hypothesis " has been put forward, its practical significance led scholars to take advantage of a variety of ways to verify it. Overseas, verification basically focus on a single industry. Domestically, verification focused on geographical differences. Few researchers focus on the verification of the suitability of "Porter Hypothesis" on all the industry from the perspective of the entire industrial system.Strategic emerging industries is growing emphasis on new types of industries since 2009. Compared with the conventional development path of traditional industries, strategic emerging industries show significant difference. They embody the global property economy, circular economy, low carbon economy trend, and also represents the development direction of future technologies and industries. In order to promote industrial upgrading and transformation of traditional industries, Chinese government has taken a series of measures. Meanwhile, a series of supporting policies have also been implemented to promote the development of strategic emerging industries. Under this condition, there exist significant difference between this two industries development in both external environment and internal features, which is bound to have a role in environmental regulation. Before verifying the applicability of Porter Hypothesis, this dissertation define three hypothesis:1. Government environmental regulation cause hysteresis on industrial technology innovation.2. The impact on industrial technology innovation of environmental regulation reveal significant industry differences.3. Fiscal policy, tax policy and other external environmental factors can also affect technology innovation through environmental regulation.In order to verify the correctness of the above assumptions, and compare the different impact of environmental regulation on technology innovation between traditional industries and emerging industries. This dissertation will divide technological innovation into two phases:transformation segment and final conversion segment and establish dynamic panel model using generalized differential moment estimation method to respectively compare and analyze the impact of environmental regulation on strategic technology innovation from both traditional and emerging industries of in these two phases. Afterwards, following conclusions are:(1) conventional industrial environmental regulations can cause lag effect on technological innovation; (2) impact on environmental regulation of strategic emerging industries on technological innovation presents complex nonlinear; (3) no significant advantages have been found on financial incentive policies implemented on strategic emerging industries; and (4) strategic emerging industries tax policy is more conducive to industrial innovation.The innovation of this dissertations are:1. Domestic researches on Potter differences usually focus on the geographical differences of Porter Hypothesis, single industries, or all of the industry’s total factor productivity. These researches lack generalize or distinctiveness. This dissertation, from the perspective of the entire industrial system, divides all the industry into traditional industries and emerging industries, and compare the industrial difference of environmental regulations on technology innovation.2. In the past, in the filed of the study on the impact on technological 1 innovation of environmental regulation, domestic scholars usually regarded the patent number as the standard of technological innovation. In fact, this practice is quite inappropriate. Technological innovation is not the equivalent of patent number. Moreover, these patent should be converted into products. Depending on the nature of technological innovation, this dissertation will divide technological innovation into two stages and then respectively compare the industry differences of Porter Hypothesis.From the aspect of empirical process and results, this dissertation also has many shortcomings:1. The dichotomous classification of industrial system into the traditional industries and emerging industries is a new attempt, and therefore this study may lack solid theoretical basis; 2. The empirical results show that the overall impact of environmental regulation on strategic emerging industries in technological innovation is complex non-linear, but there is no further research to manifest this nonlinear effect; in addition, considering the data availability, this dissertation had to use the data of high-tech industries instead of emerging industries, which may lead to deviation of the results. These are all the section that need to be improved in the future.