Abstract
This paper is the first to systematically review the theoretical mechanisms of environmental regulation and trade comparative advantage that affect the green transformation and upgrading of the manufacturing industry. On this basis, corresponding hypotheses are put forward. The non-radial and non-angle SBM (slacks-based measure) efficiency measurement model with undesirable outputs was used, combined with the use of the ML (green total factor productivity index) productivity index to measure green total factor productivity. Finally, the theoretical hypothesis was empirically tested using data from 27 manufacturing industries in China from 2005 to 2017. The results show the following: (1) There is a significant inverted U-shaped curve relationship between environmental regulation and the transformation of the manufacturing industry. In other words, as environmental regulation increases, its impact on the transformation and upgrading of the manufacturing industry is first promoted and then suppressed. (2) When there are no environmental regulations, the trade comparative advantage of the manufacturing industry is not conducive to industrial transformation. However, under the constraints of environmental regulations, the comparative advantage of trade will significantly promote the green transformation and upgrading of manufacturing. Therefore, in order to effectively promote transformation and upgrading of the manufacturing, this paper proposes the following policy recommendations: (1) The Chinese government should pay more attention to the impact of environmental regulation intensity on the transformation of manufacturing industries, further increase the intensity of environmental regulation within the reasonable range, and fully exert the positive effects of environmental regulation on the trade patterns and manufacturing industry transformation. (2) We should further optimize the structure of trade, realize the diversification of manufacturing import and export, and promote its transformation into high-end manufacturing. On this basis, green production technology in the manufacturing industry can be improved through the technology spillover effect. (3) Efforts should be made to improve the level of collaborative development between environmental regulation and trade patterns and to explore the transformation path of the manufacturing industry with the integration of environmental regulation and trade patterns.
Highlights
As environmental regulations have been conspicuously enhanced and as global economic integration has rapidly developed, the impact of environmental regulations on the comparative advantage of a country’s trade has attracted widespread attention among scholars [1,2]
Once the level of environmental regulation exceeds the inflection point of the inverted U-shaped curve, it will significantly increase the costs for the manufacturing industry, inhibit the green total factor productivity (GTFP), and inhibit transformation and upgrading of the China’s manufacturing industry
The Michaely index (MIC) is adopted to replace the trade comparative advantage index, and referring to the practice of Zhang et al [38], the ratio of the investment for environmental pollution governance to the main business costs is used to measure the intensity of environmental regulation (ERS1)
Summary
As environmental regulations have been conspicuously enhanced and as global economic integration has rapidly developed, the impact of environmental regulations on the comparative advantage of a country’s trade has attracted widespread attention among scholars [1,2]. In order to effectively improve environmental performance, China has introduced a series of guidelines and policies, including limiting and stopping production in some manufacturing industries. This policy, which is at the expense of economic benefits in exchange for environmental benefits, will have certain effects in the short term, it cannot be a long-term solution
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