Impacts of Environmental Regulation on Sustainable Economic Growth

A comprehensive evaluation of the costs and benefits of environmental regulations provides empirical evidence for policymakers to formulate and introduce environmental policies. Firms’ profitability and competitiveness manifest their market power and provide the micro foundation for economic development and social stability. Therefore, this paper focus on investigating the impact of air pollution environmental regulation on manufacturing firms’ market power, measured by markups, with a difference-in-differences (DID) method. Using air pollution control policy, requiring China’s Key Cities for Air Pollution Control (KCAPC) to meet air quality standards within a specified time limit as a natural experiment, our DID estimations show that air pollution regulation significantly leads to an increase in firms’ markup rate by 0.002 in key cities that did not meet air quality standards. Heterogeneous effects show that this impact is larger for polluting firms, private-owned and foreign-owned firms, and firms located in western and central cities and cities with high marketization. Productivity and market share may be two main influencing channels to explain the positive impact of air pollution environmental regulation on firms’ markups. Our findings suggest that strengthening environmental regulation is conducive to improving the competitiveness and market power of manufacturing firms, lending support to the enforcement of environmental regulations.

There is considerable concern about the economic impacts of environmental regulations. Jonathan Fisher, former Environment Agency (EA) Economics Manager and now the Director of Jonathan Fisher Environmental Economics, reviews the available evidence on this subject. Section 2.2 presents estimates of the costs and benefits of environmental regulations. Section 2.3 reviews the available evidence on the impacts of environmental regulations on economic growth and competitiveness. Section 2.6 reviews current and recent developments of EU environmental regulations. Section 2.6.1 then examines the implications of Brexit for UK environmental regulations. Finally, Sect. 2.7 sets out some best practice principles to improve the impacts of environmental regulation on sustainable economic growth, innovation and technical change.

The implementation of a reasonable and effective environmental regulation policy can compensate for the dual externalities of green technology innovation and improve green innovation efficiency. Therefore, environmental regulation policy has gradually become an effective means of solving ecological environment problems and achieving green industrial transformation. This paper measures the green innovation efficiency of 30 provinces in China from 2009 to 2019 using the SBM (slacks-based measure) of super-efficiency based on the undesirable output. The dynamic panel regression model is established to explore the impact of different environmental regulations on green innovation efficiency and regional differences. The results reveal that the green innovation efficiency of the 30 provinces shows a fluctuating upward trend, but that differences among provinces are relatively significant. There is a nonlinear relationship between environmental regulation and green innovation efficiency. The impact of command-control and market incentive environmental regulations on green innovation efficiency shows inverted N-shaped and U-shaped patterns, respectively. In different regions, the impact of environmental regulation on green innovation efficiency is also different. In order to ensure that environmental regulation promotes green innovation efficiency, some recommendations are proposed for the government, enterprises, and three regions, respectively.

The validity of existing empirical tests of the Pollution Haven Hypothesis (PHH) is constantly under scrutiny due to two shortcomings. First, the issues of unobserved heterogeneity and measurement error in environmental regulation are typically ignored due to the lack of a credible, traditional instrumental variable. Second, while the recent literature has emphasized the importance of geographic spillovers in determining the location choice of foreign investment, such spatial e ects have yet to be adequately incorporated into empirical tests of the PHH. As a result, the impact of environmental regulations on trade patterns and the location decisions of multinational enterprises remains unclear. In this paper, we circumvent the lack of a traditional instrument within a model incorporating geographic spillovers utilizing three novel identi cation strategies. Using state-level panel data on inbound U.S. FDI, relative abatement costs, and other determinants of FDI, we consistently nd (i) evidence of environmental regulation being endogenous, (ii) a negative impact of own environmental regulation on inbound FDI in pollution-intensive sectors, particularly when measured by employment, and (iii) larger e ects of environmental regulation once endogeneity is addressed. Neighboring environmental regulation is not found to be an important determinant of FDI. Key Words: Foreign Direct Investment, Environmental Regulation, Spillovers, Instrumental Variables, Control Function, Heteroskedasticity

Based on a survey of investment practices of U.S. oil and gas companies, this paper assesses investment techniques in current use and the impact of environmental and tax regulations. Questionnaires sent to selected oil and gas companies, professional consultants, and bank engineers concentrated on seven major areas: capital availability, investment analysis techniques, cost of capital, risk analysis, impact of environmental regulations, valuation of property acquisitions and miscellaneous investment considerations. Replies were analyzed to obtain the distribution of responses for each question, and cross-correlations between size of capital budget and responses in the major areas. In the areas of capital rationing, impact of environmental regulations and investment evaluation methods, significant differences in the responses across firm size or between firms and consultants are not apparent. Differences are apparent for determination of discount rates, causes of capital limitations, value of nominal discount rates and effect of AMT. The average nominal after-tax discount rates reported by firms and consultants are 14% and 13%, respectively. A little over half of our responding firms report that AMT has had a negative impact on investment. Results are compared to those of a similar study showing the trend in investment analysis and the broadening scope of concerns in picking good investments. Introduction This paper presents the results of a survey of investment practices of U.S. oil and gas companies. In order to obtain a full spectrum of views, questionnaires were sent to (i) 308 oil and gas companies, selected from the Oil and Gas Journal 400 (OGJ400), Dun and Bradstreet's Million Dollar Directory 1991 and the Annual Review of California Oil and Gas Production 1990, (ii) 75 investment advisors. with listings in the Journal of Petroleum Technology, and (iii) 62 bank engineers listed in the Bank Engineers' Directory. 108 companies, 25 consultants and very few of the banks responded. The latter were not analyzed. Over 90% of the responding firms are registered corporations, and include 6 of the 10 with largest total assets. Of 107 respondents, 63 indicate a capital budget of less than $10mm, 25 between $10mm and $200mm, and 19 greater than $200mm. We designate the first group as small, the second as medium and the third as large. A substantial majority (72.6%) indicate a capital budget of less than $50mm; in the previous survey the corresponding proportion was 42%. Findings are:(i)About two-thirds of the firms report some constraint on their capital budget. This frequency is consistent with 68% of respondents reporting that they formally rank capital projects.(ii)IRR and payout time are the most popular discounting and non-discounting methods, respectively, for both firms and consultants.(iii)A significant proportion determine their discount rate subjectively; in contrast, an overwhelming majority of respondents deal with risk quantitatively.(iii)Environmental regulations pertaining to groundwater contamination and pit closure rules are most important in affecting investment decisions; potential liability and punitive damages is the greatest concern relating to environmental regulations. P. 53^

Under the pressure of environmental degradation and resource depletion, Chinese companies are confronted with the need for transformation and upgrading promoted by technological innovation. However, environmental regulation can help to promote technological innovation. Based on the panel data of China's 30 provincial levels during 2009-2016, firstly, this paper describes the connotation of environmental regulation and measurement intensity of the regulation. Then, the anti-driving effect of environmental regulation on enterprise technology innovation is analyzed. Finally, this paper analyzes the spatial heterogeneity of environmental regulation on enterprise technology innovation. The empirical results are as follows: (1) formal environmental regulation has effectively enhanced technological innovation of enterprises. However, informal environmental regulation generally can positively drive enterprise technology innovation. (2) The impact of environmental regulation on technological innovation of enterprises is spatially heterogeneous. On the one hand, the impact of formal environmental regulation on technological innovation has significant regional differences. The Eastern China generally supports the "Porter hypothesis," while the Middle of China and Western China have the opposite performance. On the other hand, there is a threshold effect between environmental regulation and technological innovation. When the economic development level of the first lagging period is used as the threshold variable, with the gradual improvement of the economic development level, the technological innovation of the enterprise has the effect of first suppressing and promoting, and then verifying the threshold characteristics of environmental regulation on technology innovation.

Based on the data on the level of environmental regulation and the degree of coastal marine pollution in 46 coastal prefecture-level cities in China from 2004 to 2016, this study uses the mediation effect model and the spatial Durbin model to analyze the impact and role of environmental regulation on offshore pollution from multiple dimensions and mechanisms. The findings are as follows: (1) Environmental regulation has an inverted “U”-shaped nonlinear effect on coastal marine pollution, which first intensifies and then inhibits. (2) Promoting green technology innovation is an important mechanism for environmental regulation to improve the quality of the marine environment, and the impact of environmental regulation on green technology innovation is characterized by a “U” shape. (3) Environmental regulation of coastal cities can affect coastal marine pollution in adjacent areas through spatial spillover effects, and the impact trajectory also shows an inverted “U”-shaped curve. This study proposes that in the process of marine environ-mental governance, first, a scientific and strict environmental regulation system should be constructed, and differentiated environmental regulation policies should be implemented. Second, giving full play to the conduction effect of green technology innovation and promoting the research and development, diffusion, and application of green technology are necessary. Third, we must attach importance to the cross-regional transfer and control of offshore pollution and promote regional joint prevention and control work.

The complex relationship between environmental regulation and green technology progress has always been a hot topic of research, especially in developing countries, where the impact of environmental regulation is important. Current research is mainly concerned with the impact of the single environmental regulation on technological progress and lacks study on the diversity of environmental regulations. The main purpose of this paper is to examine the heterogeneity of the effects of different types of environmental regulation on industrial green technology progress. As China’s scale of economy and pollution emissions are both large, and the government has also made great efforts in environmental regulation, this paper takes China as the example for analyses. We first use the EBM-GML method to measure the industrial green technology progress of 30 provinces in China from 2000 to 2018, and then apply the panel econometric model and threshold model to empirically investigate the influence of 3 types of environmental regulation. The results show that, first, the impacts of environmental regulation on industrial green technology progress are significantly different; specifically, command-based regulation has no direct significant impact, and autonomous regulation has played a positive role, and market-based regulation’s quadratic curve effect is significant, in which the cost-based and investment-based tool presents an inverted U-sharped and U-sharped, respectively. Second, there may be a weak alternative interaction among different types of environmental regulation. Third, a market-based regulatory tool has a threshold effect; with the upgrading of environmental regulation compliance, the effect of a cost-based tool is characterized by “promotion inhibition”, and that of an investment-based tool is “inhibition promotion”. Finally, the results of regional analysis are basically consistent with those of the national analysis. Based on the study, policy enlightenment is put forward to improve regional industrial green technology progress from the perspective of environmental regulation. This paper can provide a useful analytical framework for studying the relationship between environmental regulation and technological progress in a country, especially in developing countries.

Under the new normal of economic growth, implementing environmental regulation policies and developing digital finance have become essential factors affecting high-quality economic development. This study aims to examine whether environmental regulation has a positive effect on high-quality economic development and what impact digital finance has in the process of environmental regulation affecting high-quality economic development. This study uses the panel data of 30 provinces in China from 2011 to 2019 to measure the high-quality economic development by using the entropy-TOPSIS method based on constructing an indicator system for high-quality economic development. Then, environmental regulations are classified into four categories: economic, command based, legal, and supervised, and digital finance is included in the analysis framework. The impact of heterogeneous environmental regulations on high-quality economic development and the indirect influence mechanism played by digital finance are empirically analyzed. The results show that command-based environmental regulation significantly hinders improving economic development quality. In contrast, supervised environmental regulation plays a significant positive role and can therefore serve as an essential driver of high-quality economic development. In addition, digital finance plays a significant positive moderating role in the influence of environmental regulation on the economy's high-quality development level. After the robustness test, the conclusion is still valid. Further heterogeneity analysis shows that the impact of environmental regulation on high-quality economic development and the moderating effect of digital finance differ across dimensions of economic quality development and have regional heterogeneity. The research findings are conducive to formulating appropriate environmental regulation policies and giving full play to the positive role of digital finance, providing support for promoting high-quality economic development.

As an important means to promote regional low-carbon development, environmental regulation has great theoretical and practical significance for achieving the goal of carbon-neutral development in China. Based on the panel data of 30 provinces and cities in China from 2005 to 2019, this paper first uses the intermediary effect model to analyze the impact of the implementation of environmental regulation policies on regional carbon emissions, discusses the relationship between environmental regulation, green technology innovation and carbon emissions, and further uses the threshold effect model to discuss the nonlinear relationship between environmental regulation and regional carbon emissions. The results show that: the improvement of formal and informal environmental regulation can play a role in “forced emission reduction”; Green technology innovation plays a complete intermediary role in the impact of environmental regulation on regional carbon emissions; At the same time, the impact of formal and informal environmental regulation on regional carbon emissions has a threshold effect. Among them, formal environmental regulation has a double threshold effect, the threshold values are 0.429 and 0.502 respectively, while informal environmental regulation has a single threshold effect, the threshold value is 1.803. The results of heterogeneity analysis show that there are obvious differences in the implementation effects of environmental regulation policies under different economic development levels and industrialization development stages. Therefore, we should pay attention to the mutual promotion effect of different types of environmental regulation, strengthen the collaborative emission reduction of environmental regulation and green technology innovation, and improve the level of regional green technology innovation, so as to better promote the realization of regional carbon neutrality goals.

Under the background of green development and brand building, this article aims to explore the relationship between environmental regulation on corporate brand value and the mediating effect of green innovation, which can help enterprises build a synergistic mechanism between brand building and green development, and step into a benign track of high-quality development. Based on institutional theory and resource-based theory, this paper takes the 106 listed companies on the 2018–2022 consecutive list of China’s 500 Most Valuable Brands as a sample and constructs a two-way fixed-effects model to test the impact of heterogeneous environmental regulations on green innovation and corporate brand value. The empirical results showed that: (1) Command-based environmental regulation exhibits an inverted U-shaped relationship with brand value, as it compels enterprises to adopt environmental governance in the short term but gradually erodes productive resources and triggers negative environmental and reputational effects over the long term; market-based environmental regulation demonstrates a U-shaped relationship with brand value: while it crowds out production funds and shifts costs to consumers in the short term, the government’s “resource compensation” effects ultimately outweigh “compliance cost” pressures in the long run; (2) green innovation plays a partial mediating role in the impact of command-based environmental regulation on corporate brand value; (3) the impact of environmental regulations on corporate brand value is heterogeneous in terms of the nature of corporate ownership, life cycle, and location. The above findings provide a useful reference for the government to use environmental regulation tools flexibly, optimally adjust the environmental regulatory mechanism, and promote corporate brand building and green development.

Environmental regulations, technological innovation, and low carbon transformation: A case of the logistics industry in China

Based on the data of 30 provinces in China, the super-efficiency EBM model is used to calculate the agricultural ecological efficiency in China, and analyze the impact of different environmental regulations on the agricultural ecological efficiency. The results show that: China’s agricultural ecological efficiency is not optimal. Specifically, the main grain production areas and grain balance areas have not reached the optimal efficiency, and the main grain sales areas have basically reached the optimal efficiency. In addition, among the influencing factors, the influence degree of different environmental regulations is well distinguished, which is the focus of this paper. We can find that command control environmental regulation and market incentive environmental regulation have a significant positive effect on different regions. Among them, market incentive environmental regulation has a significant positive impact on the agricultural ecological efficiency of the whole country and the grain balance areas. Command controlled environmental regulation has a significant positive impact on the agricultural ecological efficiency of the whole country and the main grain producing areas. So, it is necessary to formulate environmental policies according to the actual needs of development.

Introduction: Studying the influence and mechanism between environmental regulation, environmental protection investment, and enterprise green technology innovation is crucial to realize ecological civilization construction and sustainable economic growth.Methods: Based on the green patent data and the corresponding enterprise data of A-share heavily polluting industry enterprises from 2010 to 2020, a comprehensive index of environmental regulation is constructed, and the system GMM estimation method, threshold effect test, and intermediary effect model are used. The impact and mechanism of environmental regulation on enterprise green technology innovation are studied, and the heterogeneity of property rights is analyzed.Results: The following conclusions are drawn: 1) Environmental regulation presents a “U”-shaped relationship of first suppressing and then promoting enterprise green technology innovation, and there is only a single threshold effect, and the “inflection point” is 2.756. 2) There is an intermediary effect of environmental investment in the impact of environmental regulation on enterprise green technology creation; that is, environmental regulation affects enterprise green technology innovation by affecting the environmental protection investment behavior of enterprises. 3) State-owned enterprises are more sensitive to environmental regulation, and environmental regulation has a greater impact on enterprise green technology innovation.Discussion: These conclusions play an important role in the formulation of environmental policies by governments and in the green development of enterprises.

The impact of environmental regulations on corporate performance and decisions has attracted significant attention from academics, practitioners and policymakers. We extend this line of research to examine the impact of regional environmental regulations on firms’ cash holdings. We find that environmental regulations motivate firms to increase cash holdings. Further analyses reveal that firms increase cash holdings due to having less debt financing, decreased sales and more green innovation, all caused by environmental regulations. Under regulatory pressure, firms operating in more competitive industries, facing more financial constraints, having more environmental expenditure and belonging to the secondary sector tend to hold more cash than other firms, while firms with better CSR performance do not maintain as high cash holdings as their counterparts. We further demonstrate that increased cash holdings caused by the imposition of environmental regulations increase firm value.