A Research On The Impact Of Environmental Regulation On The Migration Behaviour Of Enterprises In China

In recent years,environmental pollution has become an obstacle in the process of China’s high-quality economic development,not only damaging the living environment of the people,but also bringing economic losses to the country.The Chinese government has therefore put in place a relatively strict environmental regulation policy to address the environmental pollution problem.However,with the escalation of environmental regulations in China and the increasing regional differences in the intensity of environmental regulations,more and more enterprises are moving to areas with weaker environmental regulations in order to avoid the higher costs of environmental management.At the same time,environmental regulations can also influence the migration behaviour of enterprises by increasing their labour costs and promoting their technological innovation.It is important to analyse the mechanism of environmental regulation on the migration behaviour of enterprises in order to promote regional economic development and realise the social and environmental benefits.However,there are relatively few articles on environmental regulation and the migration behaviour of enterprises.Therefore,on the basis of a micro-data sample of Chinese industrial enterprises from 2003 to 2013,this thesis uses a Probit model to study the impact of environmental regulations on the migration behaviour of enterprises,matching panel data of prefecture-level cities.Specifically,based on the pollution refuge hypothesis,cost decision theory,shared wage theory and theories related to the Porter hypothesis,this thesis firstly uses the Probit model to estimate the effect of environmental regulations on the migration behaviour of firms and selects urban precipitation as the instrumental variable in this thesis to further test the empirical results,followed by robustness and heterogeneity tests,and finally uses the mediating effects model to test the role of labour Finally,a mediating effects model was used to test the role of labour costs and technological innovation.The findings of this thesis are as follows.Firstly,the basic regression analysis shows that environmental regulation significantly promotes business relocation,and the instrumental variables approach and the three robustness tests further support the reliability of the baseline regression results.Second,the heterogeneity analysis shows that at the regional level,environmental regulations promote the relocation behaviour of enterprises in the eastern region more than in the central and western regions;at the firm level,(1)strict environmental regulation policies significantly promote the relocation behaviour of private,Hong Kong,Macao,Taiwan and foreign-funded enterprises compared to state-owned enterprises;(2)large-scale enterprises have a tendency to"grow large but not fall down" compared to small-scale "At the industry level,distinguishing between factor-intensive industries,upgrading the intensity of environmental regulations has a significant contribution to the relocation behaviour of enterprises in labour-intensive and capital-intensive industries.Thirdly,the mediating effects model shows that both labour costs and technological innovation levels are important mechanisms through which environmental regulations influence firms’ migration behaviour.In terms of labour costs,environmental regulations increase the labour costs of firms and thus promote relocation.In terms of technological innovation,environmental regulation does promote technological transformation and active patenting,while an increase in technological innovation has a dampening effect on migration.On the basis of the above research findings,this thesis provides the following policy recommendations.Firstly,set up differentiated regulatory policies to promote reasonable business operations.Secondly,provide financial subsidy policies to clarify the dedicated use of funds.Third,optimise environmental regulation policies to lead enterprises to technological innovation.Fourth,implement joint regional governance to achieve industrial transformation and graduation.Therefore,the making of China’s environmental regulation policies should be tailored to local conditions,and differentiated environmental regulation policies should be formulated for different regions and enterprises of different nature,so as to achieve a mutual win-win situation of environmental protection and coordinated development of regional economy.