Impact Of Trade Liberalization And Environmental Regulation On Innovation

Over the past four decades of reform and opening up,China's economy has grown rapidly in both size and volume.In 2015,China's total number of patent applications reached more than 1.1 million,ranking first in the world for many consecutive years.Guangdong,China's economic pacesetting province,ranked first in innovation in 2018,with 240,000 units.With China's economic growth has been driven by factors,investment has been driven by innovation.As a new economic growth point--innovation,what are the factors that hinder or drive innovation? As the trade war between China and the United States goes on and on,the trading environment in GuangDong,the largest foreign trade province,is constantly changing,and the intensity of environmental regulation is rising as people's requirements for the quality of life become higher and higher.Therefore,it is of great significance to analyze and study the relationship between trade openness,environmental regulation and innovation.Based on the panel data of 21 prefecture-level cities in GuangDong province from 2007 to 2016,this paper USES the static panel data model to analyze the impact mechanism of environmental regulation and trade opening on innovation in GuangDong province.The ratio of the total import and export goods of each prefecture-level city to the GDP of the region is used as the indicator of trade opening,the compliance rate of waste water as the environmental regulation,and the patent as the indicator of innovation.Models of mixed effect,random effect and fixed effect were established respectively.After that,a mediation effect test was carried out,and stata software was used for regression.It is concluded that the intersection of trade opening and environmental regulation will promote innovation,but trade opening will lead to the reduction of environmental regulation intensity,and the reduction of environmental regulation intensity will inhibit innovation.Therefore,the intensity of trade opening should be moderately enhanced.However,before the intensity of trade opening is enhanced,some policies,laws and regulations should be further improved,and government investment in scientific research and innovation should be increased,so as to make up for the crowding out effect of "innovation quasi-rent" brought by trade opening.Continuously improving the intensity of environmental regulation can not only enable people to live a better life and enhance people's happiness,but also contribute to the improvement ofinnovation level.In environmental regulation and trade openness,through the analysis of cross terms found its existing in independent innovation,this shows that the open trade while reduce the strength of environmental regulation,but will shock people for environmental regulation intensity desire to ascend,and therefore makes some polluting enterprises will be under the intervention of the government was forced to innovation road of development.The environmental regulation intensity should be appropriately enhanced,but the improvement of some government measures before the trade opening intensity is conducive to the faster improvement of the independent innovation level of GuanDdong province.