Government Environmental Regulation Research Articles

Evaluating the Impact of Low-Carbon Urban Policy on Corporate Green Innovation—Evidence from China’s National Low-Carbon City Strategy Program

Low-carbon urban policy (LCUP) and corporate green innovation are considered crucial strategies and methods for reducing urban carbon emissions, addressing climate change, and promoting urban environmental sustainability. This study constructed a quasi-natural experiment based on the low-carbon city strategy program implemented in China in 2010, utilizing data from Chinese prefecture-level cities and publicly listed companies from 2005 to 2020. Employing a multi-period difference-in-differences (DID) approach, this paper reveals that the establishment of low-carbon model cities effectively fosters green innovation in corporations. Further analysis demonstrates that this promotional effect is particularly significant in non-state-owned enterprises, enterprises with high media attention, those with a high level of digitalization, and enterprises located in cities with high levels of green finance and in the Eastern and Central regions of China. These conclusions withstood a series of robustness tests, confirming their validity. Meanwhile, the examination of policy mechanisms reveals that public environmental awareness, government environmental regulation, and corporate environmental information disclosure are three key policy transmission mechanisms through which LCUP affects corporate green innovation. The findings of this study provide significant empirical insights for addressing climate change and enhancing the sustainable capacity of urban environments.

Do Climate-Related Risks Perception Drive Corporate Green and Low-Carbon Transformation? Evidence from Listed Companies in China

ABSTRACT The extreme weather and climate occur frequently attracted high attention from society, which brings high uncertainty risks to enterprises. This study uses a fixed effects model to investigate the impact of corporate climate-related risk perceptions on their behavior. We found that increased climate-related risk perception catalyzes corporate green and low-carbon transitions (GLCT). From the perspectives of internal governance and external supervision, it is found that executive risk aversion, government environmental regulation, and investor attention can all contribute to the positive impact of climate-related risk perception on GLCT. Additionally, corporate climate-related risk perceptions can contribute to transition outcomes and lead to favorable capital market responses by improving GLCT actions, and that the contribution of climate-related risk perceptions to GLCT is stronger among non-state-owned enterprises and high-polluting industries. This study provides strategic insights for organizations to effectively manage climate risk.

Green credit policy and default risk of the heavy polluting corporations

This paper uses a double-difference model to test the impact of green credit policy on the default risk of heavy polluters based on the data of China listed companies from 2008 to 2021. It is found that green credit policy can significantly reduce the default risk of heavy polluters, and the reduction effect is more significant in state-owned enterprises. Further mechanism tests show that green credit policy reduces default risk by guiding heavily polluting firms to reduce financial leverage. Government environmental regulation and corporate green innovation capacity affect the role of green credit policy on corporate default risk. With the strengthening of regional environmental regulations and the enhancement of corporate green innovation capabilities, the effect of green credit policies in diminishing the default risk for companies with high pollution levels is increasingly evident. This study not only enriches the literature on green credit but also demonstrates the effectiveness of directing banks and various financial entities to allocate resources reasonably, guiding heavily polluting enterprises to control risks, and steadily achieving green transformation. These findings hold significant implications for decision-making in designing environmental policy and management strategies.

How Climate Change Affects Labor Mobility: Empirical Evidence from the CLDS

ABSTRACT Regional climate conditions have become a key factor that is exacerbating the process of China’s labor spatial mobility. In contrast to previous research based on mixed cross-sectional data and floating population sample selection, this study uses unbalanced panel data from the China Labor Force Dynamic Survey (CLDS) from 2014 to 2018 and a regional temperature dataset to examine the impact of climate change on inter-provincial and municipal labor mobility outflow from the perspective of local household registration, and further investigates regional reallocation and stock effects of labor related to climate change. The findings reveal four relevant results. First, after eliminating the influence bias of individual fixed effects, the labor force outflow effect of climate change across regions is significantly smaller than that found in previous research, at only one-fifth of existing research conclusions. Second, the mechanism analysis shows that temperature can affect labor mobility through individual health, happiness and government environmental regulation. Third, the impact of climate change on labor mobility has significant heterogeneity. Labor flows from underdeveloped regions to developed areas and from the central and western regions to the eastern region, and climate change has a greater impact for workers with higher education levels. In addition, climate change has a greater impact on workers with higher family incomes and family age structures. Fourth, the impact of climate change on labor mobility exhibits temperature-based threshold effects. This study provides a new perspective for understanding the impact of climate change on labor mobility, offering valuable policy support for guiding the rational flow of labor and urban managers’ formulation of strategically targeted measures.

Does Digitalization Facilitate Environmental Governance Performance? An Empirical Analysis Based on the PLS-SEM Model in China

The development of digitalization has brought about profound changes in government governance, enterprise production and residents’ daily lives. Whether digitalization inhibits environmental pollution is a question that needs to be answered urgently, as it is of great significance for addressing conflicts between human beings and the ecological environment. Moreover, it provides a theoretical basis for China’s green and sustainable development. China’s environmental governance model is in a new stage of “government, enterprise, and public” multifaceted governance. Therefore, this paper empirically analyzes the impact of digitalization on environmental governance performance and its mediating effect from a multidimensional perspective, using inter-provincial panel data from 2011 to 2020 as a sample and employing structural equation modeling. It is found that digitalization can significantly improve environmental governance performance, while mechanism analysis shows that digitalization improves environmental governance performance through improving government environmental regulation, public environmental participation, and corporate green technology innovation. Heterogeneity analysis shows that the contribution of digitization to environmental governance performance varies significantly according to geographic region and regional innovative capacity. Based on this, policy recommendations are proposed in terms of digitalization construction, the government, public and enterprises to form a multi-governance environmental governance system among the government, public and enterprises.

The Impact of Consumer Environmental Preferences on the Green Technological Innovation of Chinese Listed Companies

Using the data of companies from heavily polluting industries listed on China’s A-share stock market from 2011 to 2022, this paper empirically investigates the impact of consumer environmental preference on green technological innovation. The results indicate that consumer environmental preference significantly promotes the green innovation of firms from heavily polluting industries. Moreover, consumer environmental preference imposes a higher influence on strategic green innovation than substantive green innovation. The mechanism tests suggest that consumer environmental preference encourages green technological innovation by strengthening the environmental protection concept and increasing R&D investment. Finally, we find that rising consumer environmental preference has a more prominent effect on the promotion of green innovation for enterprises in regions with higher levels of marketization and lower government environmental regulation, larger enterprises, and private enterprises.

How digital government mediate the influence of fossil fuels on green innovation: Evidence from China's a-share industrial enterprises

China's rapid economic growth has resulted in a heavy reliance on fossil fuels, necessitating effective government intervention to facilitate their green transformation within the industrial sector. Therefore, a comprehensive investigation into the impact of mineral resource and fossil fuel dependence (ED) on the green transformation of Chinese enterprises, alongside the role of digital governance systems, holds paramount importance. This study delves into the influence of ED on firms' green technology innovation (FGI) using data sourced from A-share industrial enterprises listed on China's Shanghai and Shenzhen stock exchanges during the period from 2011 to 2021. Additionally, it examines the internal mechanisms facilitated by digital government, and provides insights into the heterogeneity observed from the perspectives of enterprises' industry classifications and sizes. The following conclusions are drawn: (1) ED significantly impedes the enhancement of green technology innovation levels among listed industrial enterprises, and this finding remains robust across multiple testing methods. (2) ED demonstrates varying inhibitory effects on firms' green technology innovation, with the most pronounced impact observed in the energy production and supply industry and the mining industry, and a relatively weaker effect observed in manufacturing enterprises. Furthermore, the inhibitory effect of fossil energy dependence on green technology innovation is observed to be stronger in small-scale enterprises compared to their larger counterparts. (3) The advancement of the digital economy notably mitigates the inhibitory effect of fossil energy dependence on firms' green technology innovation. (4) ED primarily diminishes the level of green innovation by reducing the stringency of government environmental regulations, hindering regional marketization, and impeding the industrial structure's upgrade.

Bank digitalization and corporate green innovation: empowering or negative?

In the context of bank digitalization construction, this paper explores the impact and mechanism of bank digital transformation on corporate green innovation based on the data of listed enterprises from 2010 to 2021. It is found that bank digital transformation enhances the overall and strategic nature of corporate green innovation but has no significant impact on corporate substantive green innovation. The mechanism analysis shows that bank digital transformation can promote corporate green innovation by inhibiting corporate financialization and alleviating corporate financing constraints. Government environmental regulation and media attention have a positive moderating effect on the relationship between banks’ digital transformation, and enterprises’ green innovation, i.e., an increase in the level of government environmental regulation and an increase in media attention will strengthen the promotion effect of banks’ digital transformation on enterprises’ green innovation. Heterogeneity analysis shows that the promotion effect of banks’ digital transformation on corporate green innovation is more significant for state-owned enterprises, heavily polluted enterprises, large-scale enterprises, and enterprises in the eastern region. Therefore, the digital transformation of banks can “empower” the green innovation of enterprises, help the green development of enterprises, and lead the high-quality development of the economy. At the same time, the study’s results also show that the green development of enterprises should not be “superficial” but “substantial.”

Public environmental concern, government environmental regulation and urban carbon emission reduction—Analyzing the regulating role of green finance and industrial agglomeration

In the multifaceted realm of environmental governance, emphasizing public environmental participation as an informal regulatory mechanism, alongside the influence of formal governmental environmental regulation on regional carbon emissions, contributes to providing empirical evidence and policy insights for China's “dual‑carbon target” action plan. Using data from 282 prefecture-level cities in China from 2011 to 2020, this research develops an analytical framework for urban carbon emissions encompassing public environmental concern, environmental regulation, green finance, and industrial agglomeration. And through an amalgamation of theoretical insights and empirical validation, the study elucidates the mechanisms by which public environmental concern impact urban carbon emissions. It further delves into the mediating role of environmental regulation and the moderating effects of green finance and industrial agglomeration. It reveals that: (1) Public environmental concern significantly reduces urban carbon emissions, particularly in northern cities, non-environmental protection key cities, and resource regeneration cities. And this suppressive influence is markedly more potent via mobile platforms compared to PC channels; (2) Environmental regulation serves as a partially mediating role between public environmental concern and urban carbon emissions, suggesting that public environmental concern reduces emissions by amplifying governmental environmental oversight; (3) Both green finance and industrial agglomeration play a positive moderating role on the effect of public environmental concern in reducing urban carbon emissions.

Environmental regulation and corporate environmental performance: A bibliometric analysis

Under the concept of green development, enterprises will face more environmental constraints. Whether government environmental regulation (ER) can effectively promote corporate environmental performance (CEP) has not yet been unified among scholars, and few studies have conducted bibliometric analysis on ER and CEP. Based on the above, this study has three purposes: first, to fill the research gap by analyzing and visualizing 72 articles on ER and CEP through Biblioshiny and VOSviewer; second, to help scholars easily understand the research development and quickly find promising research directions; and lastly, to enable the government and corporate managers gain a more comprehensive view of ER’s impacts on CEP, which can assist in policy making and business management. The research found that: (a) the number of articles and citations in the field is on the rise. China is the most academically influential country in terms of publications, citations, and collaborations. Journal of Cleaner Production is the top-ranked journal. Ramanathan R, Testa F, and Zhang Y are the top three authors. Environmental management, sustainability, and China are the most popular keywords. Collaboration between authors, institutions, and countries is relatively weak and isolated. (b) ER and CEP have three emerging clusters: Climate Change, FDI, as well as Environmental Awareness, and three core clusters: Environmental Management, Data Envelopment Analysis, and Economic Analysis. The evolution of themes shows a trend from decentralized to centralized and then back to decentralized. (c) Future research can take the Regulatory Framework, Green Technological Innovation, and Environmental Management System as breaking points.

Entrepreneurial spirit: A catalyst on the road to green and sustainable development——A theoretical analysis based on dynamic games and empirical tests from Chinese data

Environmental protection and sustainable development are now profoundly ingrained in the public consciousness in the modern era of the global green revolution. First, this paper uses an evolutionary game model to theoretically analyse the impact of environmental regulation and green finance on enterprises by dissecting the game behaviour between local governments, banks and enterprises. Then, we incorporate entrepreneurial spirit into the model to determine whether entrepreneurial spirit accelerates the achievement of green sustainability objectives. Environmental regulation and green finance are found to contribute substantially to the innovation of green technologies by local enterprises, while entrepreneurial spirit accelerates this process. Finally, we empirically test the findings based on a prefecture-level panel dataset from 2007 to 2020. We find that green finance has a positive impact in Central and Western cities of China, while Eastern cities are in greater need for government environmental regulation controls. For entrepreneurial spirit, the incentive effect of entrepreneurial spirit on the level of green technology innovation is more significant in Central and Western regions of China. This paper enriches the field of research on entrepreneurial spirit and regional green sustainable development by providing empirical evidence for the evaluation of environmental regulatory and green financing policy impacts.

Environmental Social Responsibility, Local Environmental Protection Strategy, and Corporate Financial Performance – Empirical Evidence from Heavy Pollution Industry

Abstract This article empirically examines the “responsibility-performance” interaction in the process of environmental social responsibility decision-making by enterprises, using the listed companies in the heavy pollution industry as the research sample. We also use the evolutionary game theory to construct a system dynamics model for simulation analysis to explore the evolutionary qualities of the environmental responsibility behavior of heavily polluting enterprises and its relationship with financial performance under the influence of local government environmental regulation. It finds that for environmental social responsibility, a company's expected performance surplus is more likely to promote positive interaction between responsibility and performance than a gap; for regions with relatively negative environmental strategies, environmental social responsibility provides more efficient reputation transformation and motivates companies to invest in it; more competitive industries and enterprises with forward-looking environmental strategies tend to put performance feedback into the undertaking of environmental social responsibility. Therefore, the government and regulatory authorities should urge heavy polluting enterprises to implement environmental responsibility, so that they can fully realize that emission reduction and growth can be achieved at the same time and promote the financial performance of enterprises and environmental responsibility while forming a win–win situation at the ecological level and corporate social level.

Unveiling the trajectory of corporate green innovation: The roles of the public attention and government

In the ongoing pursuit of establishing a diversified environmental governance system, individuals, businesses, and various social groups are increasingly articulating their ecological demands in a conscious and organized manner. Recognizing the pivotal role of public attention (PA) in shaping business behavior is imperative for advancing a sustainable and environmentally friendly economy. Consequently, this study delves into the relationship between PA and corporate green innovation (CGI) by analyzing data from A-share industrial listed companies in Shanghai and Shenzhen spanning the years 2011–2020. The analysis employs fixed effects and a mediation model to provide a nuanced understanding of the dynamics involved. The study's findings underscore the following key points: (1) Elevated levels of public attention significantly influence CGI. (2) Government research and development (R&D) subsidies assume a regulatory role in the interplay between PA and CGI, particularly within state-owned enterprises, as well as the mining and manufacturing industries. However, it is noteworthy that an overly generous subsidy policy may inadvertently stifle corporate R&D innovation. (3) Government environmental regulations and corporate social responsibility indirectly shape the association between PA and corporate R&D innovation. Consequently, a fundamental strategy for fostering corporate green development lies in the effective management of government R&D subsidies and environmental regulations. Striking the right balance in these aspects while urging businesses to augment their sense of social responsibility is vital. This approach will pave the way for an efficient and enduring interaction system among the public, government, and companies, ultimately facilitating sustainable development and contributing to the realization of a beautiful China.

Research on the impact of green mergers and acquisitions of heavily polluting enterprises on the quality of environmental information disclosure: empirical evidence from listed companies in China

AbstractGreen mergers and acquisitions are an important means for heavily polluting enterprises to achieve green transformation. Previous studies have yielded inconsistent conclusions regarding the relationship between green mergers and acquisitions and the level of corporate environmental management, possibly due to the omission of considering the quality of corporate environmental information disclosure. Therefore, based on a sample of 908 observations of heavily polluting listed companies on the A-share market of Shanghai and Shenzhen from 2010 to 2019, Utilizing a fixed-effects model, this study empirically examines the relationship between green mergers and acquisitions and the quality of environmental information disclosure and further explores the boundary effects of government environmental regulation and property rights on this relationship. The results show that green mergers and acquisitions of heavily polluting enterprises have a significantly positive impact on the environmental information disclosure quality of acquiring firms, and government environmental regulation positively moderates the relationship between green mergers and acquisitions and environmental information disclosure quality. Through subgroup analysis based on different property rights, it is found that compared to non-state-owned enterprises, state-owned enterprises exhibit a stronger positive relationship between green mergers and acquisitions and the quality of environmental information disclosure. This study has further enriched the relevant literature on green M&A and environmental information disclosure, provided new ideas for heavy polluting enterprises to achieve green transformation, and provided a reference for the government and enterprises to take countermeasures and suggestions.

Does negative environmental performance feedback induce substantive green innovation? The moderating roles of external regulations and internal incentive

AbstractWhen the environmental performance is below the aspiration, will firms make substantive changes? In order to answer this question, based on the behavioral theory of the firm, this paper examines the impact of negative environmental performance feedback on substantive green innovation (GI) and its influencing mechanism. It is found that the negative environmental performance feedback induces substantive GI, which is positively moderated by external regulations (i.e., government environmental regulation and public environmental concern) and internal incentive (i.e., executive equity incentive). Media pressure and risk preference act as mediators in the above promotion effect. Heterogeneity analysis shows that the above promotion effect as well as the moderating effects of external regulations are more pronounced in private firms, while the moderating effect of internal incentive is more pronounced in state‐owned firms. Furthermore, the above promotion and moderating effects are more pronounced after the ESG rating event of SynTao Green Finance Agency. This paper offers new sights into understanding the motives of substantive GI and policy suggestion for promoting firms to achieve sustainable development.

Public Environmental Concern and Corporate Environmental Governance

We examined the impact of public environmental concerns (PEC) on corporate environmental governance (CEG). Using Chinese listed companies in Shanghai and Shenzhen stock market as our research sample, we find that the higher the regional PEC, the better the level of CEG, and the positive effect of PEC on CEG is more significant in the sample of non-state owned enterprises. An examination of the influence mechanism finds that PEC increase government environmental attention and therefore more stringent government environmental regulations are developed to constrain corporate environmental decisions. This study will help us better understand the unique role of the public in corporate environmental strategy in the Internet era.

Innovating from the ground up: the impact of key technological advancements on collaborative carbon and haze governance.

Strengthening the synergistic management of carbon and haze is an important means to realize China's "carbon peaking and carbon neutrality goals" and green development. In this paper, the entropy method is used to measure the key core technology innovation level of 30 provinces in China from 2011 to 2021, and the fixed-effect model is used to empirically test the impact of key core technology innovation on carbon haze synergistic governance and the internal mechanism. The study found that (1) key core technological innovation helps to promote carbon haze synergistic governance. (2) The mechanism test shows that key core technology innovation promotes the synergistic management of carbon haze by improving the clean energy structure. (3) The moderating effect shows that both market incentives and government environmental regulations will strengthen the positive relationship between key core technology innovation and carbon haze synergistic governance. The main contribution of this paper is to reveal the influence mechanism of key core technology innovation on carbon haze synergistic governance, and also to provide theoretical basis for the mechanism and law of carbon haze synergistic governance.

The green effect of digital transformation: The impact of digital transformation in fiscal and taxation on regional green development

As green sustainable development has become a major development goal in the world today, it is very important to analyze the impact of digital reform of finance and taxation on the green economy. Based on panel data from 30 provinces in China from 2005 to 2020, our study explores the impact of fiscal and tax digitization on green growth by taking China's “Golden Tax Phase III Project” as an example. First, the results of this study show that the digital transformation of fiscal and taxation will curb regional carbon emissions and promote regional green development through the green technology innovation effect and green finance development effect. Second, the dynamic regression results of this study prove that with the increase in regional carbon emissions, the green development effect brought by the digital transformation of fiscal and taxation will show a gradually weakening trend. Finally, our research also found that due to different levels of new energy development, government environmental regulation intensity, industrial development level, economic development level and other aspects of different cities, the green development effects brought by the digital transformation of finance and taxation are also different. Our study adds to the body of knowledge on fiscal and tax reform and ecological growth, validates the beneficial impact of these changes on local green development, and expands the scope of current research.

Corporate green technology innovation under external pressure: a public and media perspective

The presence of external environmental constraints has the potential to impact corporate decision-making behavior regarding production and spur innovative activities. This study focuses on a sample of Chinese A-share-listed corporations to investigate the influence of public environmental concerns (PEC) on corporate green technology innovation (GTI) within the framework of public participation in environmental governance. Moreover, this study explores the synergistic effects of media concerns and PEC. The main conclusions of this study are as follows: (1) PEC is a driving force for corporate GTI. Endogeneity and robustness tests support this finding. (2) Government environmental regulation and corporate environmental responsibility are critical mediating variables. (3) Heterogeneity analysis shows that PEC significantly impacts the GTI of state-owned corporations, high-tech corporations, and corporations that have obtained ISO 14001 certification. (4) Media concerns enhance GTI and exhibit a strong synergistic effect with PEC. Positive media news strengthens the “incentive effect” of PEC, while negative news plays a “pushing role.” This study provides theoretical and empirical support for constructing an environmental governance mechanism for the public, media, corporations, and government.

Dynamic evolution of China's government environmental regulation capability and its impact on the coupling coordinated development of the economy-environment

Effective environmental governance in China is crucial for promoting global environmental governance initiatives. The government's environmental regulatory capacity (GERC) is a core metric reflecting the effectiveness of China's environmental governance. This paper aims to investigate the strength of China's GERC and empirically verify its impact on the coupling coordinated development of the economy-environment (CEE). We use a multiple indicators and multiple causes model (MIMIC) to measure the governmental environmental regulation capabilities of 30 provinces in China, from 2007 to 2018. Then, the econometric model is used to test the impact of the GERC on CEE. The results show that, although the GERC exhibits an overall upward trend, it is still at a low level for most regions. The GERC in different regions of China exhibits a certain gradient effect, with a weak polarization trend. The increase in the GERC of regions with high levels of economic development is significantly faster than that in regions with low levels of economic development. Moreover, the improvement in the GERC has not promoted coordinated development between the economy and the environment, which means that there is still a mutual “crowding out effect” between economic development and environmental protection in China.