Technology import modes, environmental regulation types and total factor energy efficiency

Abstract

ABSTRACT This paper examines the mediating roles of different modes of technology import on the relationship between environmental regulations (ERs) and total factor energy efficiency (TFEE) by using the data of 30 provinces of China from 2008 to 2019. Based on the Porter hypothesis, this work reveals that different modes of technology import can be driven by different environmental regulation types, including command-control environmental regulation (CCER) and market-incentive environmental regulation (MIER), which have different impacts on TFEE. By distinguishing technology imports into the purchases of foreign technology (POFT) and the imitations of foreign technology (IOFT), the results show that CCER and MIER induce corporate executives to focus on POFT, resulting in sluggishness in self-innovation and accordingly undermining TFEE. The MIER shifts corporate executives’ attention on IOFT, inspiring them to focus on re-innovation, and is beneficial for improving TFEE. Additionally, this research finds that technology absorption capacity (TAC) can blunt the negative relationship between POFT and TFEE, as well as strengthen IOFT’s positive effect on TFEE. This research unearths the roles of different technology import modes and environmental regulation modes on TFEE. It also uncovers the role of TAC as a moderator for improving TFEE within the context of technology import. It offers a new dialogue perspective about the effects of environmental regulation types on green development, and contributes to the porter hypothesis literature by incorporating the missing technology import factors into the theory, and also provides managerial and policy implications.