Environmental Regulation Tools Research Articles

Does Environmental Regulation Promote Eco-Innovation Performance of Manufacturing Firms?—Empirical Evidence from China

As the world becomes more concerned about carbon emissions, the Chinese government, which is a large contributor to carbon emissions, has also begun to pay attention to the issue of carbon emissions. Environmental regulatory policies have been implemented to improve the environment, but are these policies really conducive to improving firms’ eco-innovation performance? This paper empirically investigates the relationship between environmental regulation policies and firms’ eco-innovation performance in China and finds that: firstly, environmental regulation in China is inadequate and that manufacturing eco-innovation performance is generally low; secondly, there is a U-shaped relationship between environmental regulation policies and firms’ eco-innovation performance; thirdly, there is significant industry and regional heterogeneity in the induced effects of environmental regulation tools; and fourthly, there is a mediating effect of industrial agglomeration on the promotion of firms’ eco-innovation performance. The conclusions of this paper are: firstly, that the Chinese government should continue to improve environmental regulations and strictly enforce them so that green becomes the colour of ‘economic recovery’; secondly, that the Chinese government should develop scientific and reasonable environmental regulatory policies according to local conditions; thirdly, that Chinese companies should increase their spending on research and development; and fourthly, that the Chinese government needs to optimise the industrial layout and support mechanisms. The Chinese government should play an active role in industrial agglomeration in technological innovation.

New media environment, environmental regulation and corporate green technology innovation:Evidence from China

Understanding the impact and mechanisms between new media environment, environmental regulation and corporate green technology innovation are crucial to achieve environmentally inclusive growth of sustainable development goals. Based on the sample of Chinese A-share listed companies in the heavily polluting industries for the period 2010–2020, this paper investigates the impact of the new media environment and environmental regulation on corporate green technology innovation. The empirical results indicate that (i) the new media environment can motivate heavily polluting enterprises to meet stakeholder demands and significantly improve their corporate green technology innovation; (ii) heterogeneous environmental regulatory instruments (pollution charges and environmental protection subsidies) can jointly improve the green technology innovation of corporations through pushback and compensation effects; and (iii) effective environmental regulation tools can strengthen the stakeholder relationship between the government and enterprises, enhance the resource preparation and dynamic capabilities of heavily polluting enterprises to respond to public opinion crises, and thereby positively moderate the promotion of new media environments on corporate green technological innovation. Our findings help identify new drivers of corporate green technology innovation and confirm the combined effects of the new media environment and environmental regulation in stimulating corporate green behavior, which can facilitate the construction of ecological civilization.

Heterogeneous environmental regulation tools and green economy development: evidence from China

The implementation of environmental regulation policy by the government is usually an effective tool to reduce local pollution emissions. The super-efficient SBM model of unexpected output was used in this study to estimate green economy development levels in 30 Chinese provinces from 2010 to 2019 and constructed a panel econometric model. It empirically tested the theoretical hypothesis and mechanism of heterogeneous environmental regulation affecting green economy development by using the least squares estimation, the instrumental variable method, spatial panel regression, the mediating effect model, and further models. The relationship between command-controlled environmental regulation and green economy development was U-shaped, whereas green economy development was not significantly influenced by market-incentive environmental regulations. Command-controlled environmental regulation affected green economy development via the progress of pollution control technology and production technology. The strengthening of command-controlled environmental regulation progressed pollution control technology as regional enterprises continually improved, while production technology was initially suppressed, then promoted. Market-incentive environmental regulation mainly affected the green economy development level through pollution control technology progress, while the mediating effect of production technology progress was insignificant. This study provides some empirical support for the verification of Porter’s win-win hypothesis and the realization of green economic transformation in emerging countries such as China.

Exploring the economic impacts of carbon tax in China using a dynamic computable general equilibrium model under a perspective of technological progress

The carbon tax, as one of the environmental regulation tools, is likely to promote technological progress, which is ignored in previous works when evaluating the economic impact of a carbon tax. This study uses the Generalized Method of Moment model to investigate the effect of an environmental tax on total factor productivity and energy efficiency, and takes the effects as approximations of the effects of carbon tax on technological progress into the computable general equilibrium model as well as considering technology diffusion, to analyze the dynamic impact of carbon tax on China's economy growth. A carbon tax policy negatively impacts GDP at the early stage, but technological progress would make GDP impacts “turn negative into positive” in the late stage. With a carbon tax rate of 100 Yuan/ton, the GDP impact becomes positive from the 4th year and rises to 0.3% in 2030. Not all industries can realize the output of “turning negative into positive,” only low-carbon-intensity industries can achieve a clean transition. Overall, this study discusses the dual effects of a carbon tax on technological progress and increasing fossil energy costs, which provides a new perspective for an in-depth discussion of a carbon tax.

How do heterogeneous environmental regulations affect the sustainable development of marine green economy? Empirical evidence from China's coastal areas

Under the dual constraints of environment and resources, it is imperative for China to achieve sustainable development of its marine economy through establishing effective mechanisms and intensifying environmental regulations to promote green transformation of the marine economy. By incorporating both marine economic development factors and environmental pollution factors into the marine green economy development evaluation system, this study measures the marine green economic efficiency (MGEE) in China. On this basis, the dynamic panel smoothed transition regression model is used to analyze the nonlinear effect and transition mechanisms between environmental regulation and marine green economic efficiency, and the heterogeneous effects of market-based and command-and-control environmental regulation tools are examined by distinguishing the forms of environmental regulation as well as regional development differences. The findings are as follows: ①under the setting of different transition variables, both market-based environmental regulation (MER) and command-and-control environmental regulation (CER) exhibit a non-linear relationship with MGEE during the transition between the high regime and the low regime. ②Both CER and MER contribute positively to the advancement of MGEE after exceeding certain thresholds through changes in the marine industry structure (MIS) and marine technology innovation (MTI). The driving impact of CER is noticeably stronger than that of MER after the threshold of MIS is exceeded, whereas the driving effect of MER is stronger after the threshold of MTI is exceeded. ③When foreign direct investment (FDI) is considered as the transition variable, CER consistently inhibits the growth of MGEE, however, MER's impact progressively changes from negative to positive with FDI surpassing the threshold.

Can government environmental regulation promote low-carbon development in heavy polluting industries? Evidence from China's new environmental protection law

In order to better combat environmental pollution, China promulgated the New China Environmental Protection Law (CNEPL) in 2015. Previous studies have focused more on the impact of CNEPL on the enterprise performance and green innovation, ignoring the relationship between CNEPL and industrial low-carbon development. This paper uses the implementation of CNEPL as a quasi-natural experiment and constructs a DID model to analyze whether and how government environmental regulation affect the carbon emissions intensity of heavy polluting industries. The results show that CNEPL implementation significantly reduces industrial carbon emissions intensity. Specifically, after the implementation of the CNEPL, the carbon emissions intensity of the heavy polluting industries decreased by 3.4% annually compared to non-heavily polluting industries. Heterogeneity analysis shows that the CNEPL has greater effects in industries with higher market competition degrees and larger average enterprises sizes. We further study influence mechanisms and find that re-allocation of resources, energy structure optimization, green technology innovation and energy efficiency improvement are significant influence mechanisms. Our findings provide policy insights for using government environmental regulation tools to achieve industrial carbon reduction target.

Does environmental regulation promote industrial structure optimization in China? A perspective of technical and capital barriers

As the largest developing country, China's industrial structure is in a profound adjustment procedure with the background of its structural reforms. The traditional development path is becoming unsustainable. It is increasingly an inevitable choice and also an urgent task for most developing countries in transition to start industrial restructuring. The effectiveness of environmental regulation has been a long-debated issue that is of important reference value for policy makers. Based on the annual panel data of 283 prefecture-level cities in China from 2003 to 2018, this paper builds a comprehensive evaluation of pollutant treatment. And it aims to figure out whether the positive effects of environmental regulation on the industrial structure adjustment exist at the city level. The results show that environmental regulation significantly promotes industrial structure transformation in industry structural optimization. The results remain robustly consistent after being examined through core variable substitution, instrument variable, and dropping special samples. It effectively attracts the inflow of production factors, including technology and capital, which supports industrial structure optimization through innovation offsets and financial deepening. The heterogeneous influences that environmental regulation performs on the industrial structure adjustment are discussed in the further analysis, in the perspectives of geographical location and the resource dependence of a city. Based on the theoretical analysis and empirical results, targeted suggestions are proposed in the end that the local governments under structural transition should sufficiently apply differentiated and suitable environmental regulation tools to the optimized structural evolution of the industry.

The impact of the environmental protection law issued in 2015 on different types of polluters

In this paper, the data from 2008 to 2020 of enterprises in different types of pollution industries of A-share listed companies in China are selected as samples. Through empirical demonstration, the following conclusions are drawn: First, command-based and market-based environmental regulations can effectively promote enterprises’ green innovation behavior, and command-based environmental regulations have threshold effect. Maximize the effect of green innovation within moderate intensity; otherwise, its output will be inhibited; The effect of public participation environmental regulation is not significant. Second, command-based environmental regulation, market-based environmental regulation and public-participation environmental regulation can effectively promote the improvement of enterprise environmental performance, but the good realization of environmental performance in the early stage has a restraining effect on the current value. Third, different forms of environmental regulation tools both short-term and long-term value of the enterprise has a significant role in promoting, but for the effects of long-term value is greater than the short-term profit, mainly through environmental regulation under the action of enterprise green innovation “innovation” and “first-mover advantage” and “reputation effect” of environmental performance. Fourth, under environmental regulations, enterprises’ regulation rent-seeking behavior is beneficial to enterprises’ short-term environmental performance and economic profit increase, but in the long run, it inhibits enterprises’ green innovation behavior and long-term value growth. Fifthly, by virtue of the information transmission function focused by the media, environmental regulation has a significant promoting effect on enterprises’ green innovation output, environmental performance improvement and long-term value growth, but leads to a downward trend of enterprises’ short-term profits.

Are environmental regulation tools effective? An analysis based on financial investment of entity enterprises

Environmental regulation and economic development are consistent in the long run, but there are certain contradictions in the short term. Examining the characteristics of available environmental regulation tools and using them in a way that will align the interests of local governments and enterprises can improve environmental regulation and enhance green transformation and development. This study considers two general types of environmental regulation tools: negative punishment types and positive incentive types. Applying an intermediary effect model and the two-stage least squares method, a sample of Chinese A-share listed companies from 2007 to 2019 is used to test the impact of these different types of environmental regulation tools on the financial investment levels of entity enterprises. The mechanism through which these macro-environmental regulation tools function and the micro-enterprise heterogeneity factors that influence their impact are systematically studied. The results show that negative punishment type environmental regulation tools have a positive impact on the financial investment levels of entity enterprises, while positive incentive type environmental regulation tools inhibit financial investment levels. This impact is formed through managerial incentive mechanisms referred to as “whipping the fast ox” and “heavy rewards and light punishments.” Factors such as financing constraints, relocation costs, pollution levels, and enterprise scale have heterogeneous effects on these paths. Policy suggestions are offered based on the findings. This study makes a significant contribution to the literature by clarifying the channel through which environmental regulation influences micro-enterprise decision-making. It provides a theoretical basis and policy reference for local government officials as they address the conflict between economic growth and environmental protection in the short term. Moreover, the results offer long-term development decision-making ideas for shareholders and managers in the process of green transformation and upgrading of enterprises.

Mandatory Environmental Regulation and Green Technology Innovation: Evidence from China

Faced with the severe situation of high energy consumption and major pollutant emissions, the Chinese government has adopted various mandatory environmental regulations (MERs) to improve the binding force of environmental protection policy implementation. In 2006, the environmental protection target responsibility system was implemented, and the energy conservation and emission reduction targets were linked to the performance assessment of government officials as a binding indicator. What is the impact of this policy on green technology innovation activities? Based on this, this paper identifies the relevant indicators of green technology innovation activities. It uses the difference-in-differences (DID) method to investigate the impact of mandatory environmental regulation on the quantity and quality of green technology innovation activities. The conclusions are as follows: (1) The implementation of MERs promoted the expansion of the number of green patent applications. (2) MERs also led to the decline of the quality and the emergence of the foaming phenomenon. (3) Enterprises with weak innovation ability are the main group causing the decline of green technology innovation quality, and they are concentrated in independent innovation and low-level pollution industries. The conclusion of this paper helps provide a theoretical basis and countermeasures for deepening the reform of the MER policy, strengthening the coordination of different environmental regulation tools, and establishing a market-oriented green technology innovation system and environmental protection science and technology policy.

Influence Mechanism of Different Environmental Regulations on Carbon Emission Efficiency.

The rational use of environmental regulation tools has become an important means by which to improve the efficiency of carbon emissions. Different types of environmental regulations and their combinations have different impacts on carbon emission efficiency. In order to determine the environmental regulation configurations that may achieve high carbon emission efficiency or lead to low carbon emission efficiency, we constructed an analytical framework of connections between environmental regulation configurations and carbon emission efficiency. Moreover, 30 Chinese provinces from the period covering 2016 to 2019 were selected as research cases. In addition, the super slacks-based measure of efficiency (SE-SBM) model was applied to evaluate carbon emission efficiency. Finally, the fuzzy-set qualitative comparative analysis (fsQCA) method was employed to analyze the impact of different environmental regulation configurations on carbon emission efficiency. The results showed that the carbon emission efficiency of various regions of China is generally low (with most regions not having reached an effective level) and that there are large regional differences. We found that there are four environmental regulation configurations that can achieve high carbon emission efficiency and two environmental regulation configurations that lead to low carbon emission efficiency. Based on these configurations, we draw three conclusions: (1) There are three paths to achieving high carbon emission efficiency: one that values command-and-control environmental regulation but disfavors market-incentive environmental regulation, another that combines command-and-control environmental regulation with market-incentive environmental regulation, and a third that couples command-and-control environmental regulation with voluntary environmental regulation. (2) Two paths that may lead to low carbon emission efficiency were established: excessive penalties and the lack of specific measures. (3) In some conditions, environmental governance investment and fiscal expenditure could be substituted for each other; environmental protection administrative penalties and pollution charges are synchronized; environmental governance investment in the promotion of carbon emission efficiency is indispensable. Policies and suggestions on how the government can use environmental regulation tools to improve carbon emission efficiency are proposed from a general coordinative perspective in the final section of this paper.

The impact of carbon emission trading scheme on export: Firm-level evidence from China

The carbon emission trading scheme (ETS) is an important measure to implement China’s “double carbon” strategy.We use “China’s carbon emission trading pilot policy” as a quasi-natural experiment to identify theeffect of this market-based environmental regulation on a firm’s export and its impacting mechanisms.Based on the Propensity score matching and difference-in-differences (PSM-DID) method, we observe robust evidence that the carbon emissions trading pilot policy significantly increases the export of regulated firms. And also find that this policy positivelyaffects the exports of both SOEs and non-SOEs. Considering enterprise heterogeneity, the policy positivelyimpacts the exports of FDI firms, large firms, and low industrial concentrations. Moreover, we examine how environmental regulation could affect firmexport through technological innovation, productivity, and product research. The observable evidence leads us to cautiously conclude thatmarket-based environmental regulations in even developing countries could achieve export growth.Based on our findings, we suggest that: 1) policymakers should limit CO2 emissions quotas to ensure an appropriate increase in the price of CO2 emissions; 2) to design a unified carbon ETS market, researchers should explore ways to activate market-oriented environmental regulation tools based on the carbon emission price.

Research on environmental accounting information disclosure of listed companies in textile industry

The textile industry is one of the heavy polluting industries in China. It is also one of the industries that the state clearly requires to disclose environmental information on a regular basis. Firstly, this paper analyzes the annual report and social responsibility report of listed companies in Shenzhen and Shanghai main-board textile industry. Then it points out that the disclosure of listed companies in China's textile industry is still existing in the optional way of disclosure, disclosure content is not standard and other problems. Finally, suggestions on rational use of environmental regulation tools and strengthening the construction of environmental audit system are put forward.

The "Local Neighborhood" Effect of Environmental Regulation on Green Innovation Efficiency: Evidence from China.

Current research has generally concentrated on the motivations of environmental policies on local green innovation while ignoring the effect they may have on green innovation in neighboring places. To obtain a thorough understanding and explanation of the influencing mechanism of environmental regulation (ER) on green innovation efficiency (GIE), the super-slack based measure-data envelopment analysis (Super-SBM-DEA) method was applied to evaluate Chinese provinces’ GIE, a spatial Durbin model was developed to evaluate the effect of ER on GIE from the perspective of the “local neighborhood” effect, and a mediating effect model was built to analyze the transmission mechanism of the neighborhood effect of ER on GIE. The study indicated that China’s regional GIE is high in the east and low in the west, with large spatial variability and significant positive spatial clustering characteristics. The effect of ER on local GIE is “U” shaped, while the influence on green innovation efficiency in neighboring areas is an inverted “U” shape. The influence of environmental regulation on GIE in neighboring areas is mainly achieved through the transfer of local polluting industries to neighboring areas. Based on the results, policy recommendations from the perspectives of choosing environmental regulation tools and transferring polluting industries are made to promote and realize the coordinated development of ER and green innovation.

Penalties vs. Subsidies: A Study on Which Is Better to Promote Corporate Environmental Governance

To reverse the trend of ecological environment deterioration, the government tries to stimulate firms to participate in environmental governance through environmental regulation. Then, which environmental regulation tools can better drive firms to carry out environmental governance activities needs to be corroborated by empirical studies. Using a sample consisting of Chinese A-shares listed firms from 2015 to 2019, this article investigated the effects of two heterogeneous environmental regulation tools (environmental penalties and environmental subsidies) and their interactions on corporate environmental investment. The results showed that environmental penalties have a positive impact on corporate environmental investment. Furthermore, the heavier the penalty or the higher the administrative level of the penalty subject, the more pronounced is the impact of environmental penalties on corporate environmental investment. Firms that receive environmental subsidies do not increase their investment in environmental governance. A series of robustness tests further verify that penalties have a greater impact on the environment than subsidies. In addition, it is found that environmental penalties have an environmental deterrent effect on other firms in the same industry. Our work presents evidence for the economic consequences of environmental regulation and supplements the mechanism of environmental regulation affecting corporate environmental governance. Meanwhile, this article also provides essential guidance for the positive role of environmental penalties in driving corporate environmental governance and has important practical significance for emerging market countries to choose appropriate environmental regulation tools to promote corporate green development.

Collaborative elicitation process for sustainable manufacturing: A novel evolution model of green technology innovation path selection of manufacturing enterprises under environmental regulation.

Due to promote manufacturing enterprises to carry out green technology innovation practice smoothly, achieve the goal of energy conservation and emission reduction, and win green competitive advantage, this paper first divides the green technology innovation path into two types, namely internal independent R&D of green technology (IIGT) and external green technology introduction (EGTI), and analyzes the operation mechanism of these two types of paths. Secondly, a two-agent game model of different types of environmental regulation tools on the choice of green technology innovation path of manufacturing enterprises is constructed. To be sure, the manufacturing enterprises include the leader enterprise A and the follower enterprise B. It is assumed that the two groups of manufacturing enterprises produce the same products or provide the same services in the natural state without considering other influencing factors. Finally, stability analysis and numerical simulation are employed to compare and analyze the heterogeneous effects of different environmental regulation tools on the path selection of green technology innovation in manufacturing enterprises.The simulation shows that when the government adopts or does not adopt environmental regulation means, the system, leader enterprise A and follower enterprise B will eventually choose the path of IIGT or EGTI respectively after a long-term evolution process. However, the effects of subsidy for green technology innovation and carbon tax rate on the path selection of green technology innovation are different among the three parties. Specifically, when the government adopts the means of subsidy for green technology innovation, the leader enterprise A will actively choose the the path of IIGT earlier than the follower enterprise B. On the contrary, when the government adopts the means of carbon tax, the leader enterprise A will actively choose the the path of IIGT later than the follower enterprise B. The research of this paper is helpful to explore the green and sustainable development mode of China’s manufacturing industry under the dual constraints of environment and resources, and provides decision support for the relevant national departments to make relevant policies.

Achieving Carbon Neutrality – The Role of Heterogeneous Environmental Regulations on Urban Green Innovation

This article examines the impact of heterogeneous environmental regulations on urban green innovation using panel data from 285 prefecture-level cities in mainland China from 2008 to 2019. From the perspective of green patents, this article utilizes a two-way fixed-effect model and the mediation effect model to examine the mechanism of the impact of heterogeneous environmental regulations on urban green innovation in China. Results show that the urban green innovation development in China is relatively slow and can be easily influenced by national policies. More specifically, the relationship between the command-based environmental regulation and urban green innovation presents an inverted non-linear U-shaped model, whereas the relationship between the market-based and voluntary environmental regulation presents a positive U-shaped model. Further investigation of this mechanism concludes that the progression of regional green innovation is primarily accelerated by technological development, effective energy allocation, and industrial structural upgrading. However, the implementation of relevant environmental regulations varies, resulting in various green innovation progression rates. Therefore, in order to achieve the carbon neutrality goal that China proposes, the effectiveness of environmental regulation implementation should be improved. Moreover, the development of various environmental regulation tools should be better coordinated.

Evaluating the Effect of Chinese Environmental Regulation on Corporate Sustainability Performance: The Mediating Role of Green Technology Innovation.

The environmental pollution that accompanies economic growth has always been of widespread concern. The chemical industry is a highly energy-consuming industry in China, and the pollution this industry causes to the environment cannot be ignored. The paper is based on the Porter hypothesis and uses data from different regions of China. In this paper, we investigate the mediating role of different types of environmental regulation (divided into command-controlled, market-incentive, and voluntary environmental regulation) in positively affecting sustainability performance through green technology innovation (divided into green product innovation, green process innovation, and end-of-line management innovation). The results show that different versions of the Porter hypothesis can be accepted in Chinese chemical enterprises. This finding demonstrates that environmental regulation positively impacts both green technology innovation and sustainability performance. Green technology innovation plays a mediating role between environmental regulation and sustainability performance, especially in East China. However, the mediating effect of green product innovation is not significant. Further study shows that command-controlled environmental regulation has a more significant positive effect on sustainability performance. This suggests that the market-incentive and voluntary environmental regulation tools do not fully play their functional roles. Thus, the paper demonstrates the developmental shortcomings of environmental regulation, green technology innovation, and sustainability performance. This is more conducive to chemical enterprises improving green technology innovation and achieving long-term development and ecological environment protection.

An Evolutionary Game Analysis on Green Technological Innovation of New Energy Enterprises under the Heterogeneous Environmental Regulation Perspective

In the context of economic transformation and upgrading and ecological civilization construction, green technology innovation is an inevitable choice for enterprises’ sustainable development. Can environmental regulation effectively promote enterprises’ green technological innovation and achieve a win–win economic growth and environmental protection situation? This paper uses evolutionary game theory and numerical simulation to analyze the influence mechanisms of command-control, market-incentive and social-will, three environmental regulation tools and different combinations of environmental regulation tools on green technology innovation behavior of new energy enterprises. The study found: (1) The effects of three types of environmental regulation tools on green technological innovation of new energy enterprises are different, in which market-incentive environmental regulation policies play the most significant role, followed by command-control environmental regulation and social-will environmental regulation tools are not very obvious. (2) Implementing a separate environmental regulation policy has a poor effect on stimulating green technology innovation of new energy enterprises. If two environmental regulation means are implemented, the combination of command-control and market-incentive environmental regulations is the most effective. (3) Combining the implementation of three environmental regulation means of high-intensity market-incentive, high-intensity command-control and low-intensity social-will is the best strategy combination, which can motivate new energy enterprises to become stable for the green technology innovation strategy in the shortest time.

How Do Environmental Technology Standards Affect the Green Transformation? New Evidence from China.

During the period of high-quality development in China, environmental regulations have been regarded as powerful exogenous forces, especially for accelerating the green transformation of the manufacturing industry. Treating the first implementation of cleaner production industry standard policies in 2003 as a quasi-natural experiment, and employing the difference-in-differences (DID) model, this paper discusses the impacts of environmental technology standards on the green transformation of the manufacturing industry in China, with systematic consideration of three technological modification mechanisms, including terminal governance, capital renewal, and resource structure adjustments. The results show that: (1) environmental technology standards can have “win–win” effects, i.e., environmental technology standards can simultaneously improve the environmental performance and the economic performance; (2) the dynamic effects of environmental technology standards are proven in the parallel trend test; (3) environmental technology standards can not only promote the green transformation of the manufacturing industry directly, but can also mediate the effects of terminal governance, capital renewal, and resource structure adjustments. In summary, this paper makes four suggestions for government actions, namely re-examining command-and-control environmental regulations, paying attention to environmental regulation tools, changing the mechanism from technological modification to technological innovation, and updating environmental technology standards regularly.