Heterogeneous Environmental Regulations, R&D Innovation and Manufacturing Enterprises' Export Technological Sophistication

Based on the combined data of China Patent Database, China Industrial Firm Database and China Customs Trade Database from 2004-2010, this paper investigates the impact of heterogeneous environment regulation on the export technological sophistication of manufacturing enterprises. The results show that: the impact of control-type environmental regulation on enterprises' export technological sophistication is U-shaped, and has negative effect on mixed trade enterprises, eastern enterprises and foreign-funded enterprises. The impact of incentive-type environmental regulation on the enterprises' export technological sophistication is inverted Ushaped, and has positive effect on processing trade enterprises, mixed trade enterprises, domestic and foreign-funded enterprises. The impact of participative-type environmental regulation on the enterprises' export technological sophistication has an inverted U-shaped characteristic and has a positive effect on all kinds of trade pattern and ownership of enterprises. The result of mechanism analysis shows that control and participative environmental regulation affect enterprises' export technological sophistication through fundamental innovation and practical innovation, while incentive environmental regulation also affects enterprises' export technological sophistication through design innovation. Considering environmental governance issues has clear policy implications for enhancing the R&D innovation of the whole industrial chain and improving the export competitiveness of China's manufacturing enterprises.