Abstract:Based on the mechanism of environmental regulation on the transformation of manufacturing industry under the innovation-driven background, the intermediary effect of innovation on the relationship between environmental regulation and manufacturing industry transformation is empirically studied using the panel data of 11 provinces and cities in the Yangtze River Economic Belt from 2005 to 2016. The results show that the effect of environmental regulation on the transformation of manufacturing industry has a double threshold effect under the innovation-driven background. In different ranges of innovation-driven background, the effect of environmental regulation on transformation of manufacturing industry has different directions and degrees. Therefore, attention should be paid to the synergy of innovation-driven background and environmental regulation, and the environmental regulation policies should be formulated according to local conditions. Simultaneously, the following measures should be taken to realize the transformation of manufacturing industry in the Yangtze River Economic Belt: rational allocation of fixed assets, increase of investment in education, guidance for the direction of financial expenditure, strict examination of the threshold of foreign investment access, and introduction of advanced technology.