Study On The Impact Of Environmental Regulation On Regional Industrial Transfer

Since the reform and opening up,while China’s economy is growing rapidly,the ecological and environmental problems facing the Chinese economy have become increasingly prominent.At present,how to balance environmental governance and regional industrial transfer has become an important issue concerning the sustainable and high-quality development of the national economy.China,as a typical developing country,has significant differences in the strength of regional environmental regulation,which has led to a common phenomenon of the transfer of polluting industries from regions with strong environmental regulation to regions with weak environmental regulation.But its impact on the regional economy,society and ecological environment is a "double-edged sword" : On the one hand,the relocation of polluting industries will bring about the optimization and improvement of the environment where the industries move out;on the other hand,it will lead to the destruction of the ecology,environment and resources where the industries move in,which will inevitably affect the sustainable and high-quality development of Chinese regional economy.Under the strategic background of building a "beautiful China",it is imperative to strengthen environmental regulation to limit industrial pollution emissions.However,the implementation of environmental regulation policies will not only improve the quality of ecological environment,but will also lead to an increase in the cost of regulatory compliance in related industries.On the one hand,the pressure of rising costs will cause some industries to move to other countries or regions with weaker environmental regulation(interregional transfer),or from pollution-intensive to clean(green)industries(inter-industry transfer)("Pollution Heaven Hypothesis ");on the other hand,it will also encourage incumbent enterprises to carry out(green)technological innovation to improve labor productivity and use the innovation compensation benefits to fully or partially offset regulatory compliance costs("Porter Hypothesis").In this way,this paper will integrate the "Pollution Heaven Hypothesis" and "Porter Hypothesis" to empirically test the impact of environmental regulation on regional industrial transfer and its mechanism.In this regard,this paper based on the quasi-natural experiment of the "two control zones" policy,selects the panel data of 282 prefecture-level cities in China from 1994 to 2010,and uses the DID method to empirically study the impact of environmental regulation on regional industrial transfer and its mechanism.The study finds that environmental regulation promotes regional industrial transfer at a significant level of 1%.Moreover the robustness of the conclusion of this paper has been confirmed by multi-angle tests,such as the parallel trend hypothesis,replacement indicators,long-term dynamic effects,changing time windows,and excluding other policy effects.The study also finds that the promotion effect will have regional heterogeneity due to the difference of regional market environment and resource endowment,that is the promotion effect of the "two control zones" policy on regional industrial transfer is strengthened in the order of western,eastern,and central regions,and the phenomenon of industrial transfer in high-resource-dependence regions is significantly lower than that in low-resource-dependence regions.Further mechanism research finds that environmental regulation have enhanced interregional industrial mobility and also promoted regional technological innovation,which confirmed that the "Pollution Heaven Hypothesis" and "Porter Hypothesis" are both established under the Chinese situation.At the same time,the effect of environmental regulation on technological innovation is more obvious in the areas with weak industrial mobility than that in the areas with strong industrial mobility.Based on the above conclusions,this paper puts forward the following policy recommendations: First of all,with the help of a well-designed environmental regulation policy,we can make full use of the positive effects of environmental regulation on regional industrial transfer to achieve a "win-win" situation between regional industrial transfer and environmental protection.Secondly,based on the different actual market environments in different parts of China,it is necessary to formulate and effectively implement environmental regulatory policies according to local conditions.In detail,the eastern region should vigorously promote the R & D investment of innovative technologies,the central region should actively introduce clean industries and their talents and technologies,the western region should strengthen environmental regulation and limit the transfer of foreign polluting industries reasonably and orderly.Finally,we should strengthen the backward mechanism of pollution control costs on regional industrial technology innovation,increase investment in technological innovation,and formulate a reasonable innovation incentive mechanism.We can strengthen the backward mechanism of pollution control costs on industrial technology innovation to achieve innovation-driven development,establish a reasonable innovation incentive mechanism,appropriately increase government input subsidies for industrial innovation;and related institutions should also strengthen intellectual property protection and stimulate the initiative of industrial innovation.