Abstract
Emerging economies face the challenge of increasing labor costs but also provide an opportunity to promote environmental governance and green development. Based on the perspectives of impetus and capability, the effects of rising labor costs and market environment on green technological innovation are investigated in this study. The empirical studies used the data of high-pollution firms in China from 2009 to 2018. Results demonstrate that rising labor costs deteriorates high-pollution firm performance, while highly competitive industries are affected more than other industries. Meanwhile, the influence of rising labor costs on green technological innovation has a threshold effect which illustrates an “inversely U-shaped” variation trend with the increase of degree of market monopoly. The labor costs will make biggest impact on the green technological innovation in the moderately concentrated market environment. Basing from these results, this study provides the following suggestions for emerging economies’ green development: Take rising labor cost as an opportunity to advance technological progress to the green direction, establish a sound market competition environment, and develop green finance to reduce the financing constraints of green technological innovation.
Highlights
Relying on the superiority of domestic natural resources and labor force, numerous emerging economies adopt the development pattern of high input and low technology, causing prominent energy consumption and environmental pollution
Emerging economies has become an engine of global economic growth, but it is the primary contributor to high world energy consumption and CO2 emission [1]
By contrast, rising labor costs can promote green technological innovation because it is implemented in a market environment with balanced competition intensity
Summary
Relying on the superiority of domestic natural resources and labor force, numerous emerging economies adopt the development pattern of high input and low technology, causing prominent energy consumption and environmental pollution. Possible benefits of green technological innovation include reduced cost of compliance with regulations [29], improved labor productivity and resource efficiency [30], and product differentiation [31] These benefits can enhance the competitive advantage of firms. The Environmental Kuznets Curve points out that rising income can gradually overcome the problems of the ecological environment because technological progress will reduce the economic growth’s demand for energy and other natural resources and that high living standards can improve the public’s awareness of environmental protection [43]. Some studies analyzed the significant impact of firm size and market structure on corporate green innovation from the perspective of industrial organization [44], because environmental protection activities require a huge investment of financial and human resources, and large firms have better opportunities and capabilities to reduce impacts on environment [45,46,47].
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