Abstract
Taking China’s SO2 emissions trading pilot (ETP) in 2007, a large-scale market-based environmental regulation as its target, this paper reexamines the strong Porter hypothesis by adopting the method of propensity score matching-differences-in-differences. Research shows the following results: first, SO2 ETP which provides high flexibility for enterprises in the process of emission reduction, improves total factor productivity (TFP) significantly on the whole. Second, the productivity effect of market-based environmental regulation varies from the productivity level of enterprise. For example, the SO2 ETP has a significant effect on TFP only at 40–80 percent quantile of TFP, and the effect increases at first and then decreases. Third, the financing constraints and bargaining power of enterprises have significant negative moderating effects on the impact of SO2 ETP on TFP, and the moderating effects between state-owned and non-state-owned enterprises exist heterogeneity. In conclusion, it provides reference for the formulation of market-type environmental regulations and the realization of high-quality development for developing countries.
Highlights
With the acceleration of economic growth and industrialization, the increasing contradiction between energy supply and demand, as well as the overdraft of environmental bearing abilities, have brought severe challenges to global environmental protection and sustainable development [1,2].Especially, the increasing SO2 emissions have become the main source of air pollution [3]
The results showed that Chinese SO2 emissions trading pilot (ETP) promoted enterprise innovation significantly, but without any effect on enterprise total factor productivity (TFP)
In order to guarantee the validity of the propensity score matching-differences-in-differences (PSM-DID) method, a series of corresponding tests are carried out on the matching grouping results
Summary
With the acceleration of economic growth and industrialization, the increasing contradiction between energy supply and demand, as well as the overdraft of environmental bearing abilities, have brought severe challenges to global environmental protection and sustainable development [1,2]. This paper takes China’s largest market-type environmental regulation—SO2 ETP in 2007 as a quasi-natural experiment, and makes research on the impact of SO2 ETP on TFP by the method of propensity score matching-differences-in-differences (PSM-DID) On this basis, it used the unconditional panel quantile fixed effect regression to test the heterogeneity effects of SO2 ETP on enterprises TFP at different levels of TFP. Through empirical research, this paper finds that the financing constraints and bargaining power of enterprises have a negative moderating effect on the impact of SO2 ETP on TFP It could provide reference and guidance for market-type environmental protection policies to better improve TFP.
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