Research on the Impact of Environmental Regulations on Productivity of Enterprises: Evidence from China\'s Top 1000 Energy-Consuming Enterprises Program

• 1、School of Economics & Trade,Hunan university,Changsha,410006

Abstract：Whether environmental regulation can achieve energy conservation and emission reduction, and then achieve the goal of changing industrial production mode, mainly depends on whether this measure can help industrial enterprises to improve total factor productivity.Taking chemical firms as an example, this study investigates the impacts of the Top 1000 Energy-Consuming Enterprises Program (T1000P) on firms\' TFP change rate (TFPC). Using detailed data from the China Industrial Census on 6631 chemical firms (2003-2008), the empirical results from the difference-in-differences (DID) method indicate that T1000P hinders TFP improvement. Specifically, the TFPC of firms affected by the T1000P decreased by 0.9% annually compared with those not affected. The mechanism analysis shows that the implementation of T1000P reduces pollutant emissions, increases costs, and reduces profits of regulated firms. This implies that the emission reduction performance of regulated firms is not reflected in the TFPC, but the emission reduction cost restrains it. Moreover, the growth rate of technological progress of regulated firms is slow, which affects their competitiveness. Therefore, environmental regulation policies should cooperate with measures to improve the technological competitiveness of firms, thereby promoting the green transformation of China\'s industrial development mode.

Keywords： The Top 1000 Energy-Consuming Enterprises Program (T1000P) Chemical firms Total factor productivity (TFP) Difference-in-Differences (DID)