Threshold Effect of the Environmental Regulation on the Regional Technology Innovation

Abstract

Promoting technology innovation of enterprises through the environmental regulation is the key factor to deal the relationship between economic growth and environmental regulation. All previous literatures considered the intensity of environmental regulation and technology innovation is linear relationship. But we hold the result shows that the intensity of environmental regulation and technology innovation of enterprises is in accordance with the “U” shape. The innovation effect of environmental regulation also depends on the variable of economic development level, which, however, has double thresholds. The higher threshold the economic development crossed, the clearer promotion of environmental regulation on technical innovation will be. This thesis has constructed the mathematical model between the intensity of environmental regulation and technology innovation of enterprises, and examined China’s the nonlinear relationship of environmental regulation and technology innovation on the basis of the assumed regional heterogeneity and determined the optimal level of the environmental regulation. Keywords-environmental regulation; threshold effect; technology innovation; regional impacts I. THE MATHEMATICAL MODEL ABOUT THE EFFECT OF ENVIRONMENTAL REGULATION ON TECHNOLOGY