Environmental regulation and the transformation and upgrading of city manufacturing-Based on the dual perspective analysis of the green transformation of the industrial structure and the technological upgrading of the enterprise

Based on the quasi-experiment of the 11th Five-Year National Total Emissions Control Plan of the Major Pollutants, this paper investigates the impact of environmental regulation on the transformation and upgrading of urban manufacturing industry and further analyzes the mechanism of environmental regulation. From the perspective of green transformation of industrial structure and enterprise technology upgrading, this paper constructs data samples at enterprise, industry and city levels for empirical analysis by using the industrial sectors data and data of China City Statistical Yearbook from 2002 to 2008. The empirical results show that the environmental regulation policy improves the cleanliness of city manufacturing industry and firms' TFP. Thus, this environment regulation promotes the transformation and upgrading of urban manufacturing industry. The result of mechanism analysis shows that in the short term, the policy has not been innovation-driven, but achieved green transformation of urban manufacturing industry by adjusting factor allocation. At the same time, the technological upgrading of enterprises mainly depends on the increase of government subsidies. There is no significant difference between the urban environmental protection input and the enterprise input before and after the policy. This research has reference value for clarifying the effects of environmental regulation policies, improving the internal incentives for the implementation of environmental regulations, and promoting the high-quality development of the manufacturing industry. © 2022, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.