Effect of the intensity of environmental regulation on production technology progress in 17 industries: evidence from China

We demonstrate the relationship between the intensity of environmental regulation and the progress of production technology. Using data from 17 industries in China during 2000-11, we estimate a dynamic model of production technology progress. Our empirical results indicate that a simple “U”-shaped relationship between the intensity of environmental regulation and industrial production technology progress does not exist. Some industries show a significant “U”-shaped relationship while others exhibit an inverted “U”-shaped relationship. Still others showed no significant relationship between production technology progress and the intensity of environmental regulation. We also found that there is no relationship between the effect of environmental regulation on industrial production technology and an industry's type of pollution.

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