The Impact of Environmental Regulation on Hebei’s Manufacturing Industry in the Global Value Chain

Abstract

In order to tackle increasingly serious environmental problems, China has been promoting the development of a green economy and guiding the green transformation of various regions and industries through environmental regulation in recent years. By participating in international trade, Hebei Province has been embedded in the global value chain. However, Hebei’s involvement in the high-energy-consuming and polluting manufacturing sector and its lower position in the global value chain have led to serious environmental issues. In practice, the government has promulgated environmental regulations to restrict economic activities of enterprises. What role does environmental regulation play in Hebei’s manufacturing industry’s participation in the global value chain? In order to explore the impact of environmental regulation on Hebei’s manufacturing industry in the global value chain, this paper constructs a fixed-effect econometric model based on the panel data of the embedding level of the value chain of 12 manufacturing sectors in Hebei Province. The research results show that: first, the R & D capacity of the manufacturing industry in Hebei Province still needs to be improved. Second, environmental regulation has promoted the global value chain position of Hebei’s 12 manufacturing sectors. Third, environmental regulation will show obvious heterogeneity to manufacturing industries with different capital intensities and different pollution levels. The impact of environmental regulation on the manufacturing industry with different intensities is different. Therefore, the government should formulate targeted environmental regulation to promote the position of Hebei’s manufacturing industry in the global value chain, such as further improving environmental regulation and increasing the intensity of environmental regulation and increasing the investment of human capital, and cultivating innovative talents.