Abstract: This paper adopts the nonlinear panel threshold model based on 2002-2013 China’s provincial panel data, which takes environmental regulation and technological innovation as the threshold variable, and makes an empirical study on the impact of environmental regulation and technological innovation on industrial structure upgrading. The research shows that, whether environmental regulation intensity and other factors change or not, as long as the technological innovation level improves, industrial structure upgrading can be promoted. High intensity of environmental regulation has forced effect on technological innovation, which can promote industrial structure upgrading. Environmental regulation depends on industrial technological innovation level and has different effects on the industrial structure upgrading. The higher level of marketization and population education is conducive to industrial structure upgrading. Fixed assets investment has a negative effect on industrial structure upgrading. Foreign direct investment and urbanization have not significant effect on industrial structure upgrading. Finally, it proposes some suggestions.

Key words: environmental regulation, technological innovation, industrial structure upgrading, panel threshold model