Abstract: The discharge standard of pollutants is the basic tools of environmental regulation, whose dynamic update process of“replacing old with new, replacing loose with strict”is the main driving force for the green transformation of China's manufacturing industry. This paper manually collects the information of 60 industrial water pollutant discharge standards issued in China from 2005 to 2013 and makes use of the micro-data of Chinese water polluting enterprises at the same period to conduct an empirical study on whether stricter standards can promote enterprise green total factor productivity and trigger the Porter effect by employing the multi-phase DID method. The findings show that the green total factor productivity of enterprises increased by an average of 2.28% after the improvement of the standards and that this impact is more significant in the enterprises with high pressure to meet the standards, in the enterprises with strong financing capacity and in the regions with strong law enforcement. The results of the mechanism analysis show that enterprises can achieve green transformation through the materialized technological advances contained in equipment upgrading and rebuilding and the improvement of resources utilization efficiency and management efficiency. Besides, although stricter standards failed to increase the number of green patent applications of enterprises, they significantly improved the patents quality of the enterprises. At the same time, the technological transformation needs of the affected industries would indirectly induce the green patent research and development in the upstream equipment manufacturing industry, which means that the Porter effect overflows into the upstream industries.

Key words: stricter pollution discharge standards, water polluting enterprises, green total factor productivity, Potter effect