| The increasing environmental regulation is a trend for the survival and development of Chinese enterprises.The relative impact on technical progress deserves attention.Technical progress is not always neutral.It tends to evolve towards a certain factor of production that leads to a biased technical progress.The environmental regulation policies provide new constraints and incentives for R&D activities,changeing the R&D decisions of enterprises,and thus affect the technical progress bias.This research tries to reveal the mechanism of environmental regulation influencing the technical progress bias and further discusses the consequent income distribution effect.On the basis of reviewing the literature,the function setting of biased technical progress is discussed.It is proposed that two time-varying parameters are proper in the exogenous biased technical progress research.The common production function settings,the R&D function settings and the judgment criteria in important endogenous technical progress research are summarized.I start from a production system including final products,dirty intermediate products and clean intermediate products.By separating environmental technology,the environmental regulation intensity as a coefficient is considered in the production function.The equilibrium is achieved as equipment manufacturers and product manufacturers balanced the R&D and producing activities.Environmental regulation can reverse the research and development disadvantages of the clean sector,thus making the technical change biased towards green technology.Due to the path dependence of research and development,green technology will gradually accumulate advantages in the subsequent evolutionary path,and form a virtuous cycle.It is found that the intensity of environmental regulation plays an important role in promoting green technical progress,and there is in pollution intensive industries a U-shaped relationship between the intensity of environmental regulation and the intensity of green technical progress.It provides a new perspective for understanding traditional environmental economics problems such as "Porter Hypothesis" and "Environmental Kuznets Curve".Empirical research is conducted by gathering data during 2011-2016 of 446 listed companies,and the above conclusion is confirmed.Subsequently,in an improved theoretical model,this paper unifies the R&D and production activities into the intermediate product manufacturers.The manufacturers allocate funds for R&D and production for the profit maximization.In this process,the relationship between environmental regulation and green technical progress bias affects enterprises' R&D expenditure decisions and changes the crowding out effect on production expenditure.Theoretical research shows that in pollution intensive industries there is an inverted U-shaped change between the capital technical progress bias and the intensity of environmental regulation,which is confirmed by empirical research using national accounting data of 17 industries during 2004-2016.Finally,this paper assumes that technology stock and R&D input are important factors of production.Dividing labor into skilled labor and unskilled labor that respectively engages in R&D and production,the outputs of R&D activities are considered random events.The more advanced manufacturers are in higher rung of technical ladder and with overwhelming low cost,they obtain the market dominance and all the profits.Environmental regulation changes the gap in the technical ladder between the clean producers and dirty producers,affecting the market position of the two departments.The production and R&D decision making,and the demand for unskilled labor and the skilled labor are significant changed in the market.The study found that tax enhancing or punitive type environmental regulation policies would lead to technical progress favoring skilled labor.It is further confirmed by empirical research using CHNS tracking panel data of 9 provinces during 2000-2015.The relationship between environmental regulation and the biased technical change has obvious influence on factor income distribution.Among them,the relationship between environmental regulation and capital-biased technical change affects the proportion of labor income distribution.And the relationship between environmental regulation and skill-biased technical change affects the skill premium.The above changes will result in the income equity.Therefore,the following policy suggestions are put forward.First,the government should stick to enhance the environmental regulation policy.Some provinces with low intensity of environmental regulation who have pollution intensive industries must increase their investment of environmental protection,so as to pass the turning point as soon as possible and step into the favorable section of the green technologies.Second,environment policy instruments should be carefully chosen according to the actual situation of industries and regions.Control-command policy tools should be used cautiously to weaken the green innovation ability of enterprises.The tax reduction or subsidy tolls for green R&D of production are preffered in the aspect of imcome equality.Third,the supporting policies for environmental regulation aer necessary.Environmental regulation may cause income distortion,decrease the proportion of labor income distribution and increase the skill premium.So the policies guiding the transfer of labor-intensive industries within China should be implied to avoid the rapid loss of labor-intensive industries.And the income compensation mechanism should be improved to reduce income inequality between those who suffer from pollution control and those who benefit from environmental improvement.The education should be develop vigorously to increase the supply of skilled labor and raise the income of all workers while meeting the needs of technical improvements. |
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