A Study On The Impact Of Environmental Regulation On Industrial Transfer—from The Perspective Of Local Government Competition

The economic development has entered a new normal in China and the deep-seated contradictions between economic development and resources have begun to emerge.The environmental pollution caused by the traditional “three-high” industrial development models of “high pollution,high input and high energy consumption” has affected the people's life quality,the new normal of economic development and social stability.The government has continuously stepped up environmental control efforts for the severe environmental situation.However,due to the imbalance of regional economic development and demand of restructuring and upgrading the industrial structure,as well as the existence of “economic growth” based examination and promotion mechanism for officers,the local government has serious strategic interaction in implementing the central government's environmental control policies,which results in obvious differences in regional environmental control and creates objective conditions for the inter-regional transfer of industries.In recent years,the phenomenon of industrial inter-regional transfer has become more and more conspicuous.The pollution industry has been continuously transferred from the eastern coastal areas to the inland areas of central and western China,especially those with high pollution and labor-intensive industries.The heavy environmental pressure on the eastern region and the task of restructuring and upgrading the industrial structure need to intensify the environmental regulation so as to force the polluted industries can be upgraded or transferred.In the central and western regions,due to the backward economic development level and the relatively low environmental pressure,coupled with the poor infrastructure facilities,the local government with the aims to attract investment to promote GDP growth would choose to continuously reduce the level of environmental control so that the polluted industry in the eastern region can flow into this area.In the long run,this phenomenon of industrial transfer will not only worsen the ecological environment in the central and western regions,but also have a serious negative impact on ecological equity and sustainable economic development.Therefore,the aims of this study are how to rationally utilize the policy of environmental control to guide the rational and orderly transfer of industry in order to avoid the embarrassing competition situation of environmental regulation in localgovernments and against the administration after the contamination in the central and western regions.The previous researches did not take into account China's special decentralization system and failed to analyze the root of the pollution according to the environmental regulation behavior of local governments.Besides,these empirical researches are absent of deeper consideration of the influence of environmental regulation on the industrial transfer in China from the perspective of governmental competition and few systematic and in-depth study from the perspective of theoretical level.Based on this,taking the competition of local governments as the cut-in point of view and industrial transfer as the object,this paper presents the hypothesis to be tested after systematically analyzing the transmission mechanism of “local government competition-environmental regulation-industrial transfer” and conducts a further analysis of the impact of environmental regulation on industries transfer based on evolutionary game.Then,based on the experience,the author analyzes the fact of the spatial and temporal evolution of industrial inter-regional transfer and the status quo of environmental regulation in all regions.Based on the panel data of 30 provinces and municipalities in China from 2001 to 2011,we first selected the indicators of industrial transfer of pollution-intensive industries and cleaner production industries in order to see the impact of industrial transfers.And then,a test of the strategic interaction between local governments for environmental regulation competition to attract industrial capital inflows.Finally,according to the conclusion of all,we put forward the targeted policy recommendations.The findings are as follows:(1)The overall level of environmental regulation in China shows that the intensity of environmental regulation in the central and western regions is lower than that in the eastern regions.From the perspective of the transfer characteristics of industrial space,the output growth rate of pollution-intensive industries in the central and western regions and the growth rate of the number of enterprises are obviously higher than those in the eastern region.Besides,the output growth rate of cleaner production-oriented industries in the eastern region is significantly higher than that in the middle.However,the growth rate of enterprises shows that the growth rate in the central and eastern regions is significantly higher than that in the western regions.(2)The impact of environmental regulation on industrial transfer is related to specific types of industries.Specifically,in the case of pollution-intensive industries,no matter what type of environmental control means,theyall have a significant negative impact on their transfer behavior.That is,they are subject to a relatively low level of environmental control from a higher level of environmental control region,which also confirms the “pollution paradise” hypothesis.For the cleaner-producing industries,no matter what kind of environmental control mode,it has a more obvious positive impact on its transfer behavior.That is,the industries from the lower intensity of environmental regulation flows into the area with higher intensity of environmental regulation,which also confirms the “pollution halo” hypothesis.(3)There is indeed a strategic interaction of environmental regulation and control competition among all regions of our country.This interactive strategy adopts a convergence strategy that imitates and comparisons with each other.There is a convergence strategy among local governments to reduce the level of environmental regulation in order to attract industrial capital investment inconsistent phenomenon,that is,environmental control “race-to-the-bottom”.Based on the above research findings,the policy recommendations proposed in this paper are as follows.Firstly,there is great need to guide a healthy competition in environmental regulation and increase centralization of environmental management.Secondly,a gradient of environmental control standards should be set up to guide the rational and orderly transfer of industries.Thirdly,the cooperation of local governments and the establishment of a mechanism for sharing benefits will help a lot.Lastly,the enterprises need to increase the support for research and innovation to increase the core competitiveness.