Environmental Regulation, Technological Innovation and Economic Growth-Taking the Pearl River Delta as an Example

This paper carries out a case study of the Pearl River Delta and investigates the mechanism of the promoting effect of environmental regulation on economic growth. It proposes that the core mechanism is that environmental regulation promotes technological innovation of the enterprises, which in turn promotes economic growth. An empirical test is performed using the data of 9 cities in the Pearl River Delta from 2002 to 2014 by differential GMM estimation. A U-shaped pattern is present in the relationship between environmental regulation and technological innovation. As the intensity of environmental regulation increases, the effect on technological innovation turns positive from being initially negative. The effect of environmental regulation on economic growth becomes positive from being initially negative as the intensity of environmental regulation increases.