Asian Journal of Economics, Business and Accounting

Environmental regulation, as a tool for the government and society to reduce environmental pollution and achieve social civilization and sustainable economic development, has long been a key factor in economic development, and it is of great significance to explore the impact of environmental regulation on the competitiveness of the pharmaceutical manufacturing industry on the development of China's manufacturing industry. Based on China's provincial panel data from 2011-2021, an evaluation system is constructed from four dimensions: scale, efficiency, innovation and input, the entropy method is applied to measure the competitiveness indicators of China's pharmaceutical manufacturing industry, and a benchmark regression is constructed through a two-way fixed-effects model, and heterogeneity test, robustness test and mediation test are conducted. It is found that environmental regulation has a significant positive effect on the competitiveness of China's pharmaceutical manufacturing industry, and there are differences in the impact on each region. In addition to direct empowerment, environmental regulation also enhances the competitiveness of pharmaceutical manufacturing industry through technological innovation, and its mediation effect is significant. Finally, based on the above findings, it is recommended that the intensity of environmental regulations and subsidies should be increased, differentiated environmental regulation policies should be formulated, and milder market interventions should be used to create a healthy and positive market environment, and the introduction of scientific and technological talents should be increased in order to enhance the scientific research strength of China's pharmaceutical manufacturing industry.