Abstract: Based on the analysis of the mechanism of action of environmental regulation on green technology innovation ability, this paper constructs a panel threshold model with the environmental regulation intensity as the threshold variable to empirically test the nonlinear relationship between environmental regulation and green technology innovation ability using the panel data of 28 sub-sectors of manufacturing industry ranging from 2003 to 2014. The results show that: from the perspective of the mechanism of action, environmental regulation has two different functioning directions on green technology innovation, namely the “innovation compensation” and “compliance costs”, so that there is an asymmetric effect between innovation input and technological progress；analysis based on GML index indicates that there are significant differences in the influence of environmental regulation on green technology innovation ability when regulation intensity exceeds the threshold value, but with the regulation intensity turns from moderate to high degree, the influence of environmental regulation on green innovation ability changes from positive to negative; from the view of index decomposition, there is a significant inverted N-shaped relationship between environmental regulation and green technological progress, and environmental regulation has significantly positive influence on technical change of green technology innovation only in the low interval of regulation intensity; comparative analysis shows that the environmental regulation has the optimal facilitation on green innovation ability in the medium interval of regulation intensity.

Key words: environmental regulation, green technology innovation ability, manufacturing industry, threshold effect