Asymmetric effects of heterogeneous environmental standards on green technology innovation: Evidence from China

Abstract

Exploring the asymmetric effects of heterogeneous environmental standards on green technology innovation can enrich the Porter hypothesis and play a vital role in transforming industrial production modes and promoting sustainable development. Based on the Organization for Economic Co-operation and Development Technology Concordance, this study transforms the International Patent Classification (IPC)-based green patent data into provincial-industrial level green patent data during 2006–2015. Treating the implementation of cleaner production standards and pollution emission standards as a quasi-natural experiment, we employ the difference-in-differences (DID) and propensity score matching DID (PSM-DID) models to investigate the asymmetric effects of heterogeneous environmental standards on green technology innovation and examine the heterogeneous effects between different regions and industries. In addition, we use an interaction regression model to identify three influence mechanisms: market competition, foreign direct investment (FDI), and research and development (R&D) inputs. The results show that the green technology innovation effects of heterogeneous environmental standards are asymmetric. Cleaner production standards can significantly promote green technology innovation. However, pollution emission standards produce a significant inhibition effect on green technology innovation. After a series of robustness checks, such asymmetric effects are still evident. Moreover, the green technology innovation effects of cleaner production standards exhibit no heterogeneity at the regional and industrial levels. Nevertheless, the inhibitory effect of pollution emission standards on green technology innovation is confirmed in non-energy-intensive industries rather than in energy-intensive industries, indicating a significant heterogeneity at the industrial level. Concerning the influence mechanism, increasing market competition has advantages and disadvantages for the green technology innovation effects of cleaner production standards in eastern China and midwestern China, respectively. The pollution halo effect of FDI triggered by cleaner production standards exists in eastern China and non-energy-intensive industries. Cleaner production standards can stimulate green technology innovation by increasing R&D inputs. However, under the regulation of pollution emission standards in non-energy-intensive industries, R&D inputs are not conducive to green technology innovation.