An Empirical Study On The Influence Of Environmental Regulation On Industrial Agglomeration In Southwest China

Over the past 20 years,with the rapid development of China’s economy,extensive economic growth has led to a large number of unreasonable consumption of natural resources and tremendous damage to the ecological environment.The resulting environmental pollution has become a chronic disease in economic and social development and has become an unavoidable major issue in sustainable development.Therefore,it is particularly important and urgent to adopt environmental regulation policies and measures for industrial development.How to scientifically balance economic development and environmental protection is even more important especially for the underdeveloped regions that are rich in natural resources and have rapid economic development such as the southwest of China.This study combs the theory and literature related to environmental regulation and industrial agglomeration to discover that the changes in industrial agglomeration will be affected by regional environmental regulations,and it put forward the mechanism of environmental regulations’ influence on industrial agglomeration.According to externality theory,the problem of externality of industrial pollution cannot be eliminated by itself.The essence of environmental regulation is to deal with the external issues of pollution,generating additional “environmental regulations” for industrial companies and thus influence the production decision of the company.The rise of the environmental regulations will inevitably make it difficult for marginal enterprises to cope with the increase in costs,thus facing the reduction or the location transfer.This will,to a certain extent,result in the decline of industrial agglomeration level,and the decline of agglomeration scale effect will also affect the agglomerating willingness of the enterprises out of the area thus further influencing the geographical agglomeration of industry.On this basis,the threshold effect of environmental regulation on industrial agglomeration in southwest China is analyzed by using the Doorsill panel model.The empirical research finds that environmental regulation has a positive(negative)effect on industrial agglomeration when the level of economic development is relatively low(high);environmental regulation has a negative(positive)effect on industrial agglomeration when industrial pollution emission intensity is relatively low(high).Combined with the causes of environmental regulation and the above theoretical and empirical research results,the relevant countermeasures and suggestions are put forward as follows: firstly,improve cooperation mechanisms of trans-regional environmental regulation and industrial development;secondly,environmental regulatory tools should be developed and be in rational use,the intensity of environmental regulations should be based on local conditions;thirdly,promote technology upgrading and innovation,improve industrial competitiveness;fourthly,strengthen the promotion of environmental protection and green consumption.