Effects of Environmental Regulations on Technological Innovation Efficiency in China’s Industrial Enterprises: A Spatial Analysis

Wang Wang,Qiu Qiu,Zhu Zhu

doi:10.3390/su11072186

Abstract

China’s traditional industrial model is characterized by high energy consumption and high pollution, which results in many environmental problems that cannot be ignored. To achieve sustainable development, the Chinese government has proposed five development concepts of “innovation, coordination, green, openness, and sharing”. This initiative highlights the urgency of China’s efforts to strengthen environmental regulation. Based on the panel data of industrial enterprises in China from 2006 to 2015, this study not only investigates the spatial features of technological innovation efficiency, but also examines the relationship between technology innovation efficiency and environmental regulations from a spatial perspective. The results indicate that first, China’s provincial-level technological innovation efficiencies are uneven in space. Second, voluntary regulation positively affects the technological innovation efficiency of industrial enterprises at the provincial level, while mandatory regulation has no significant impact. Third, there is a spatial spillover effect in voluntary regulation at the provincial level. One highlight implication is that the government should promulgate environmental regulations based on each province’s technological innovation potential, due to the spatial differences in technological innovation activities.

Highlights

With the emergence of the Porter Hypothesis, the relationship between environmental regulations (ERs) and technological innovation has received wide attention from researchers over the last two decades [1,2,3]
The purpose of this study is to examine whether ERs affect technological innovation efficiency at the provincial level from the viewpoint of geography
This study considers the spatial agglomeration of technological innovation activities this study considers the spatial agglomeration of technological innovation activities when examining when examining the Porter Hypothesis, which will extend the literature on the Porter Hypothesis to the Porter Hypothesis, which will extend the literature on the Porter Hypothesis to geography

Summary

Introduction

With the emergence of the Porter Hypothesis, the relationship between environmental regulations (ERs) and technological innovation has received wide attention from researchers over the last two decades [1,2,3]. New research has emerged investigating the indirect effects of ERs on technological innovation [7]. These studies have typically ignored the spatial agglomeration of technological innovation activities. The purpose of this study is to examine whether ERs affect technological innovation efficiency at the provincial level from the viewpoint of geography. Provinces with high innovation inputs (i.e., R&D personnel—research and development personnel—and R&D expenditure) are mainly concentrated in eastern China; provinces with high innovation outputs (i.e., the number of patent applications and new product sales revenue) are predominantly concentrated in eastern China

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