Environmental Regulation and Regional Technical Innovation: Empirical Study Based on China Provincial Panel Data

Porter Hypothesis points that proper environmental regulation can promote technical innovation. In order to verify the applicability of Porter Hypothesis in China, this paper uses China provincial panel data from 1999 to 2007 to make empirical study on the relation between environmental regulation and technical innovation. The results reveal that the relation is significantly positive. When the degree of environmental regulation increases 1%, the number of invention patent and utility model patent increases 0.17% and 0.07% respectively. Based on the empirical results, this paper gives some suggestions from the angle of policy making of environmental regulation and technical innovation, increase of innovation input and acceleration of regional economic development.