Environmental Regulation, Industrial Heterogeneity And Technological Innovation Performance

The issue that how to protect the environment while developing the economy, has already got the attention of scholars both at home and abroad. Since the reform and opening up began in 1979,we has built China’s economic miracle, but at the same time we’re facing environmental issues, which once appeared in stages in the process of industrialization of developed countries. At present, China is in the critical stage of modern industrialization, facing dual challenges of maintaining ecological environment security and enhancing its capacity for independent innovation. Therefore, policymakers at all levels of government hope to solve environmental problems through a series of environmental regulation. Environmental regulation does play a very important role in protecting the environment. But it will inevitably increase the production cost, and influence enterprises’or industries’economic performance directly. On the other hand, the reasonable environmental regulation will induce technological innovation and then get innovation offset. The offset will make up for the cost brought by environmental regulation and even more than the cost, so as to achieve a win-win situation of environmental protection and technological innovation. We need overall analyses of the combined influences of environmental regulation.The impact of environmental regulation on technological innovation performance fundamentally depends on comparison of the environmental regulation cost and the innovation offsets. The comparison results differ in different industries. Different industries differ in environmental pollution degree, technological intensity and resource intensity, etc. The impact of environmental regulation on technological innovation performance will differ in different industries, which have above different characteristics. However, many of the current environmental regulation policies are made indiscriminately for all industries, not targeted. So it is very necessary to study the influence of environmental regulation on technological innovation performance, from the angle of industry heterogeneity. Then we can make environmental regulation policies specifically for a certain industry, so as to achieve a win-win situation of environmental protection and technological innovation.In this paper, we take the technological innovation performance as explained variable, and the environmental regulation as the main explanatory variable. We build the panel data model of environmental regulation influencing technological innovation performance. We have organized the panel data from 35 sectors of manufacturing industry from 2001 to 2010. There is no doubt that we take industrial heterogeneity into account in our empirical study. The results indicate that environmental regulation has a promoting effect on technological innovation performance. "Porter Hypothesis" has been partially verified. When we consider the pollution intensive, technology intensive, resource dependent industrial sectors, environmental regulation has promoted technological innovation performance more obviously. At the end, we make some specific policy recommendations which are targeted, hoping that the study results of this paper can provide theoretical support and ideas for achieving a win-win situation of environmental protection and technological innovation.