The Impact Of Environmental Regulation On Corporate Total Factor Productivity

As environmental issues become more prominent,the global voice for environmental protection is getting higher and higher.Environmental regulation has gradually become an important policy tool for the country and a constraint force for the national economy.As a developing country,China has always been dominated by agriculture before the reform and opening up.The rapid development of industry after the reform and opening up has not only improved the people's living standards,but also made the national economy an indispensable and important part of the world economy.However,due to this high-input,high-energy and high-pollution industrial development model,the pollution problem in our country has become more and more serious.In order to comply with the requirements of sustainable development,our government needs to develop strict and appropriate environmental regulation policies to meet the environmental and economic challenges.In social activities,compared with the garbage caused by people's daily life,the pollution emitted by the production activities of enterprises is the key to environmental problems.Therefore,enterprises have become the main regulatorytargets for environmental regulation.In recent years,the academic community has been discussing the issue of how to balance the environment and the economy.The impact of environmental regulation on the production activities of enterprises has gradually become a hot topic,and there are also many controversies.After studying the relevant literature,this paper analyzes the impact of environmental regulation on the total factor productivity of enterprises and its mechanism of action according to the implementation of specific policies in China,and discusses the key issue of how to protect the environment and economic development from “win-win”.First of all,in the process of theoretical analysis,this paper studies the impact of environmental regulation on the total factor productivity of enterprises through the influence mechanism.The conclusion is that environmental regulation has an uncertain effect on the total factor productivity of enterprises.Therefore,on the basis of theoretical analysis,it is decided to use empirical analysis to test the positive and negative effects of the influence coefficient.In view of the major revision of the Water Pollution Prevention and Control Law in China in 2008,this paper takes the revision of the bill as a natural experiment,and combines the data of the listed companies in China's manufacturing industry in 2003-2014 to apply the double difference method to establish a benchmark model to prove analysis.It can be seen from the analysis results that the influence coefficient of environmental regulation on the growth of total factor productivity of enterprises is significantly positive.It shows that the implementation of environmental regulation policies represented by legal forms in China can promote the growth of total factor productivity of enterprises.On this basis,from the dynamic perspective,it is found that the impact of this environmental policy on the production behavior of enterprises has a one-year time lag,and it plays a role from the second year after the implementation of the policy.However,its positive impact has shown a trend of weakening year by year,indicating that the Chinese government has a low enforcement force for environmental laws and regulations.Secondly,this paper divides the overall research sample into two sub-samples of environmental regulation hard-constrained areas and environmental regulation soft-constrained areas according to the provincial level.The research results show thatthe environmental regulation policy has a greater impact on the growth of total factor productivity of enterprises.It shows that local governments can more fully achieve the effect of promoting the growth of total factor productivity of enterprises only if they implement environmental regulations more strictly according to standards.On the other hand,if the company fails to implement the environmental policy issued by the central government well,it will make the polluting enterprises lack innovation power,and thus the enterprise's total factor productivity cannot be improved.Then,in order to test the influence mechanism of environmental regulation on the total factor productivity of enterprises from the perspective of cost and innovation,this paper uses the double difference model again for analysis.The analysis results are consistent with the theoretical results,that is,the implementation of environmental regulation can rapidly increase the production cost of the enterprise.However,the increase in costs in the second year after the implementation of the policy forced the company to innovate,thereby increasing the growth rate of the total factor productivity of the enterprise.Finally,based on the conclusions obtained from the empirical test of this paper,relevant policy recommendations are proposed.Given the conclusion that environmental regulation can promote business development,the government needs to develop appropriate and differentiated environmental policies.On the basis of strict control of pollution discharge standards,the government will increase the support,so as to improve the innovation behavior of enterprises.On the other hand,in response to the lack of enforcement of environmental regulations,the central government needs to strengthen supervision of local governments,restrict local government actions,and participate in environmental performance appraisal to reduce the possibility of government and enterprise collusion,so that regional environmental pollution can be effectively managed.And promote the sustainable development of the local economy.