Research On The Influence Of Environmental Governance And Shadow Economy On Regional Green Competitiveness

There are excessive consumption of resources and serious environmental pollution hidden in the China's economic development in the 40 years of reform and open up.This kind of crude pattern of economic development has hidden trouble to Chinese economy.The increasingly environmental pollution has an impact on people's life and economic development.National leaders have also paid great attention to this issue and have proposed at several meetings that the development model should be changed and the path of green and sustainable development should be taken.The convening of the 19 th CPC national congress has once again brought green and sustainable development to a new level.It is imperative to pursue green development in such an era background.The core of green development is to improve regional green competitiveness.Strengthening environmental governance and reducing environmental pollution is the key to improving regional green competitiveness.Shadow economy do exist but it is often ignored by us.The enhancement of environmental governance will increase the scale of shadow economy and weaken the intensity of environmental governance.In addition,shadow economy is usually the source of environmental pollution,but regional formal economy with high shadow economy is also better,which can promote regional green competitiveness.To better reflect the direct influence of shadow economy on regional green competitiveness and the indirect influence of shadow economy on regional competitiveness through environmental governance,it is necessary to put environmental governance,shadow economy and regional green competitiveness into a framework study considering the existence of the shadow economy.And this is also beneficial to formulating more reasonable policies and enhancing the green competitiveness of each region and promoting the sustainable development.Scholars have studied the definition of shadow economy and related economic theory.For the measurement of shadow economy,the commonly used methods include national income and expenditure difference method,official statistics method and actual labor force difference method,etc.This paper takes into account the factors that may affect the shadow economy,such as unemployment rate,direct tax,indirect tax and GDP growth rate,and estimates the shadow economy scale of 30 provinces(except Tibet)in China from 2004 to 2006 by using a more authoritative MIMIC method.The results show that the shadow economy in most regions of China is concentrated between 10% and 20% of the national model in 2004-2016 and is relatively stable.And it is found that the shadow economy in eastern regions of China is significantly higher than that in central and western regions.According to the regression results,there is a significant positive correlation between unemployment rate and indirect tax and shadow economy,and a significant negative correlation between direct tax and shadow economy.At the same time,there is a positive relationship between the growth of shadow economy and GDP growth.Shadow economy has many aspects for economic growth.On the one hand,shadow economy is transformed from a part of formal economy,on the other hand,shadow economy also enables the formal economy to get cheaper resources and labor.Regional green competitiveness is a concept proposed in recent years.Regions with high green competitiveness tend to gain advantages in competition and the model can be sustained.In this paper,the economic model of green competitiveness is decomposed into four aspects: green production,green governance,green environment and green society,and a total of 17 secondary indicators are obtained through further research in all aspects.Considering that the secondary indicators may be intersected and the model is objective and interpretable,this paper uses the principal component analysis method to estimate the regional green competitiveness of 30 provinces(excluding Tibet)from 2004 to 2016.The estimation results show that the regional green competitiveness of various regions in China has increased year by year in recent years,and sustainable development has achieved good results.The regional green competitiveness of the eastern region is significantly higher than that of the central region and the western region,which is similar to the previous shadow economic distribution.There is a close and complex relationship between environmental governance,the shadow economy and regional green competitiveness.This paper studies the relationship between the three factors through the environmental governance and the shadow economy directly returning to the regional green competitiveness,and further adding the cross-item and shadow economy quadratic terms.The results show that environmental governance has a direct and positive impact on the improvement of green competitiveness,but excessive environmental governance will lead part of the formal economy to shadow economy,which has a negative and indirect impact on the improvement of green competitiveness and the shadow economy shows a U-shaped impact on regional green competitiveness.According to the analysis of the control variables,education level and the development of the tertiary industry have a positive impact on the regional green competitivenessFinally,the paper summarizes the results and related theories,and draws the corresponding economic conclusions.And make policy recommendations that China should develop the central and western regions without neglecting the central regions and controll the scale of the shadow economy and improve the shadow economy structure while developing economy is fundamental.Also environmental governance should be moderate and China should standardize governance.As well as,China should strengthen environmental protection education and advocate green culture and improve the quality of the population.