Abstract
Environmental protection regulations adopted by governments affect the microeconomic behavior of enterprises. The Chinese government began piloting the outgoing leading officials’ accountability audit of natural resources assets (OANRA) in some regions in 2014. Based on this quasi-natural experimental setting, this paper chose heavy-polluting and resource-based enterprises in pilot regions of China from 2011 to 2016 as examples for studying the impact of the OANRA on enterprise innovation and further examines the role of government subsidies in this process. The study finds that the OANRA has no significant impact on enterprise innovation. However, with support from government subsidies, the OANRA dramatically accelerates enterprise innovation investment. The results are still seen after applying propensity matching analysis (PSM), balancing panel data and deleting special provinces. Further analysis shows that this effect is more obvious among small-scale, state-owned enterprises that are located in areas with high degrees of marketization and high bank credit constraints. This study advances the research of the OANRA’s effects on the microeconomic behavior of enterprises. Moreover, the adjustment effect of government subsidies also provides great reference value to making rational use of policy to cooperate with the OANRA.
Highlights
With the rapid growth of China’s economy since the reform and opening, environmental pollution and ecological imbalance problems have become increasingly serious
This paper studies the impact of the OANRA on enterprise innovation investments
Local officials are more likely to grant funds to state-owned enterprises when facing the OANRA to ensure that natural resources and the ecological environment are protected while promoting economic development in a region
Summary
With the rapid growth of China’s economy since the reform and opening, environmental pollution and ecological imbalance problems have become increasingly serious. How does the innovative behavior of heavy-polluting and resource-based enterprises respond to changes in environmental regulations in the pilot areas? This study examines the influence of changes to regional environmental regulations on the innovation behaviors of heavypolluting and resource-based enterprises in pilot areas under an environment in which the Chinese government changes the assessment policies of local officials, which brings a new perspective for research on enterprise innovation. The effect of environmental regulations on innovation in heavy-polluting and resource-based enterprises corruption [16], while this article emphasizes the influence of the Chinese government’s changing assessment policies regarding local officials for enterprise behavior, which expands the existing research in this field.
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