Environmental Regulation and Enterprises' TFP——An Empirical Analysis Based on China's Industrial Enterprises Data

This paper constructs a mathematical model between the environmental regulation and TFP,and tests the influence of environmental regulation on TFP using China's all state-owned industrial enterprises and nonstate-owned industrial enterprises above designated size from 1998 to 2011.The results show that:First,there is a inverted-N-type relationship between environmental regulation and TFP,which means that the initial weaker intensity of environmental regulation makes smaller environmental cost,the motivation of enterprise technology innovation is not enough,the TFP gradually reduces;When the intensity of environmental regulation increases enough to promote enterprises to carry out technological innovation,the TFP gradually increases within the reasonable environmental regulation intensity.However,when the burden of environmental regulation is more than the enterprise could afford,the TFP comes down.Second,divided 36 Chinese manufacture sectors into heavy pollution industry,moderate pollution industry and light pollution industry,based on the analysis of environmental regulation,further subdivided every industry's position on the position of the inverted-N-type curve.At present,the overall environmental regulation is low,just some heavily polluting industries break through the first inflection point,other industries are still located before the first inflection point.Therefore,reasonable environmental regulation and differentiated environmental regulation policy have important significance to pollution regulation and TFP improvements.