Abstract:

【Objective】By researching the wood processing industry using provincial data, this paper explores the different provincial environmental regulations for the wood processing industry and the status of the global value chain, and promotes coordinated development between the economy and environment protection of forestry.【Method】In view of the heterogeneity of provincial policies, resource endowments and economic levels, and taking into account the spatial spillover effects between regions, this paper used the spatial Dubin model, integrating the command control type, market incentive type formal environmental regulations and informal environmental regulations into the model, and explored theoretical hypotheses such as the “Porter Hypothesis” and “pollution refuge”. By matching the enterprise data from the China customs import and export database and the China industrial enterprise database, combined with provincial data, this paper investigated the impact of China’s environmental regulation measures on the participation of the wood processing industry in the global division of labor. 【Result】 Results show that increasing the intensity of environmental regulations can effectively promote the participation of the local wood processing industry in the global value chain. It will, however, have a negative impact on the participation of the wood processing industry in neighboring provinces in global value chain. The externalities of formal environmental regulations including command-and-control and market-motivated regulations have a U-shaped effect on the participation of the wood processing industry in the global value chain in surrounding areas, while the intensity of informal environmental regulations does not have a U-shaped effect for the participation of the wood processing industry in the global value chain. 【Covnclusion】 China’s environmental regulation intensity shows an overall upward trend, and the improvement of regional environmental regulation intensity is conducive to the improvement of the global value chain status of the local wood processing industry, while there will be negative externalities for surrounding provinces. This paper puts forward some policy suggestions, including that command-and-control formal environmental regulations should be combined with dredging and blocking, and enterprises should “follow the trend” according to the guidance of environmental regulations.

Key words: formal environmental regulation, informal environmental regulation, global value chain, wood processing