Government Environmental Regulation Research Articles

Can environmental regulation promote high-quality economic development?: Evidence from China

This study utilizes a dataset comprising 284 prefecture-level cities in China, covering the period from 2005 to 2020. Its objective is to empirically examine the influence of environmental regulation on the attainment of high-quality economic development. The assessment of urban environmental regulation and high-quality economic development is conducted in a rational manner. The results of the study indicate that the implementation of more stringent environmental regulations has the potential to improve the overall quality of urban economic growth. This conclusion provides support for Porter's theory. The primary objective of environmental regulation is to foster sustainable economic growth by encouraging the use of environmentally friendly manufacturing technologies, improving production efficiency, and attracting skilled individuals. The results of heterogeneity testing indicate that there are no significant regional disparities in the promotional impact of environmental regulation on the quality of economic development. This suggests that the government's environmental regulation plan can be successfully implemented to foster high-quality development. However, it is worth noting that the effectiveness of environmental regulation measures towards the end of governance appears to be somewhat limited in promoting high-quality development.

The power of the public: air environmental concern and corporate ESG performance

PurposeThis study aims to investigate whether and how public air environmental concern (PAEC) affects corporate environmental, social and governance (ESG) performance in emerging markets.Design/methodology/approachThis study measured PAEC using the Baidu index search keyword “雾霾 (PM2.5)” and assessed its impact on corporate ESG among Chinese A-share listed companies from 2011 to 2020 through regression analysis.FindingsThe empirical results indicate a positive relationship between PAEC and corporate ESG. Moreover, PAEC facilitates enhanced corporate ESG performance by mediating through corporate reputation and government environmental regulations. Heterogeneity analysis shows that the promotion effect of PAEC on ESG is more pronounced in the subgroups of companies with an excellent green image, low perceived uncertainty, strong management political connections, low short-termism, high industry technological levels and low pollution levels.Practical implicationsThe practical implications of this study underscore the importance for policymakers, investors and companies to prioritize PAEC and its influence on corporate ESG performance.Originality/valueThis study contributes to ESG literature by highlighting the positive impact of external oversight, such as PAEC.

Pollution Transfer under Intergovernmental Competition: Suppression or Opportunity

In recent years, the Sustainable Development Goals have introduced a “race to the top” mechanism to complement the “race to the bottom” in local governance and have an impact on pollution. This study utilizes the environmentally oriented accreditation of National Civilized Cities as a policy shock and applies the PSM-DID method to identify the pollution-relocation effects among cities triggered by the competition in local governance. The results indicate that environmentally oriented intergovernmental competition leads to the transfer of industrial enterprises to non-accredited cities, resulting in a significant increase in their pollution emissions and industrial pollution intensity. This indicates that the competition in asymmetric local governance will lead to the transfer of pollution to backward regions, which hampers the overall implementation efficiency of national environmental policies. Furthermore, heterogeneity analysis reveals that the impact is more significant for cities in the central and western regions. Being nominated for the National Civilized City accreditation helps to inhibit the influx of polluting enterprises. Cities that are not part of integrated environmental regulatory regions show a more pronounced increase in pollution emissions compared to other cities, indicating that symmetric local government environmental regulations and environmental collaborative governance contribute to restraining pollution transfer.

Examining the Factors Influencing Agricultural Surface Source Pollution in the Yangtze River Economic Zone from the Perspectives of Government, Enterprise, and Agriculture

In this study, for the period between 2006 and 2021, we used the spatial Durbin model and dynamic Generalized Method of Moments to analyze the spatial and temporal characteristics and contributory factors of agricultural surface source pollution in 11 provinces and cities within China’s Yangtze River Economic Belt from the perspectives of governments, enterprises, and farmers. In addition, we also investigated the threshold characteristics of the distortion of the factor market for agricultural surface source pollution under different levels of environmental regulation. Our results revealed a positive spatial correlation between agricultural surface pollution in the Yangtze River Economic Belt which was significant at the 1% level. Furthermore, we established that government environmental regulation, input factor market distortion, and labor transfer have significant effects on agricultural surface pollution, among which factor market distortion has a significant spatial spillover effect in this economic zone, and environmental regulation has a significant single-threshold effect, with a threshold value of 0.1405. Based on these findings, we propose practical steps for the mitigation of agricultural surface pollution from the perspectives of governments, enterprises, and farmers which could be adopted to support countryside revitalization.

Environmental regulation, green credit, and farmers’ adoption of agricultural green production technology based on the perspective of tripartite evolutionary game

The adoption of agricultural green production technologies (AGPTs) is crucial for achieving agricultural green development in developing countries. This paper establishes a tripartite game model to explore the evolutionary influence mechanism of government environmental regulation policies and bank green credit policies on farmers’ adoption of AGPT under different initial conditions and strategy choices. Through theoretical analysis and numerical simulation, we systematically deduce the evolutionary path and equilibrium conditions, as well as examine the synergistic evolutionary effect of these policies. The results demonstrate that government environmental regulation and banks’ implementation of the green credit policies effectively encourage farmers to adopt AGPT. However, conflicts may arise during the dynamic evolution process when banks choose to implement the green credit policy. These conflicts can be mitigated by utilizing market-oriented mechanisms such as loan interest rates, improving bank supervision efficiency, and enhancing farmers’ expected income. The findings of this research provide valuable insights into the development of external incentive mechanisms to promote the adoption of AGPT among farmers and foster green agricultural development.

Digital economy and inclusive green growth: The moderating effect of government environmental regulation.

As digital economy flourishes, there have been fundamental changes in the patterns of economic development, social structure, and ecological environment, which are the key elements of inclusive green growth (IGG). However, whether digital economy can effectively contribute to IGG requires further investigation. This paper evaluates the direct and spatial spillover effect of digital economy on IGG of 280 cities in China during 2011-2019 using Spatial Durbin Model (SDM). It further explores how government environmental regulation (GER) moderates this facilitating effect. The empirical results show that digital economy significantly reinforces IGG while GER weakens the benefits of digital economy to IGG. There is a significant spatial spillover effect of digital economy on IGG in neighboring regions; specifically, IGG in peripheral cities is more significantly encouraged by digital economy than in central cities. In addition, digital development demonstrates the most significant impact on IGG in central regions of China, followed by the eastern regions, with western regions lagging behind. This paper contributes theoretically and empirically to promote digital economy selectively for IGG in different regions and provides a guideline for policymakers to achieve IGG through proper GER.

Impacts of digital government on regional eco-innovation: Moderating role of dual environmental regulations

Regional eco-innovation can change the extensive development mode and promote the sustainable development of the economy and society. In the background of digital government construction, the external environment of regional eco-innovation has changed. In this study, the panel data of 125 prefecture-level cities in China from 2013 to 2020 are used to construct a fixed-effect model for empirical analysis by sorting out the relationships among digital government, regional eco-innovation, and dual environmental regulation. The following conclusions are drawn: First, digital government mainly promotes the improvement of regional eco-innovation through digital society and digital citizenship. Second, formal and informal environmental regulations have remarkable positive effects on regional eco-innovation. Third, informal environmental regulation has a positive moderating effect on digital administration and regional eco-innovation and a positive moderating effect on digital citizenship and regional eco-innovation. Fourth, formal environmental regulation cannot moderate the relationship between digital government and regional eco-innovation. This study can give priority to promoting the digital government to serve and play a role in ecological governance and environmental information disclosure, so as to provide policy opinions for the government when issuing documents supporting the improvement of regional eco-innovation, and promote the realization of a more reasonable allocation of innovation resources.

Selection and Application of Bohai Sea Environmental Governance Policy Instrumental: A Quantitative Analysis Based on Policy Text (1996–2022)

The Bohai Sea is the only inland sea in China and serves as an important carrier for the Bohai Sea Economic Zone. However, it is also one of the areas with serious marine environmental pollution. This paper selects the policy text concerning Marine environmental pollution control issued by the central and local governments from 1996 to 2022 as the research object. Based on the three policy instruments of government environmental regulation, market incentive mechanisms and public participation, and using a content analysis method to encode and quantify the text content, it was found that the Bohai Sea marine environmental governance suffers from issues such as a singular concept of the use of policy instruments, imbalance in the proportion of their use, and insufficient supervision in the event of their use. Consequently, it is recommended to adopt diversified policy concepts, optimize the structure of policy instruments, and strengthen in-process supervision in the governance of the Bohai Sea marine environment.

The impact of public environmental concern on environmental pollution: The moderating effect of government environmental regulation.

As environmental problems continue to intensify, public environmental awareness and participation have become key forces in a modernized environmental governance system. Recognizing the importance of public participation in environmental governance, this study explores the influence of public pressure on environmental pollution and its implications for China's long-term environmental management efforts. Using statistical and internet search data from 284 prefecture-level cities between 2011 and 2020, the study finds that a 1% increase in public environmental concern leads to a 0.009% reduction in pollution. The study also highlights the strengthening effect of government environmental regulation on the impact of public environmental concern. Moreover, regional heterogeneity analysis reveals a stronger effect of public environmental concern in cities facing low economic pressure. The findings of the study provide a reference for the construction of a coordinated and sustainable environmental governance model in China as well as in developing countries.

Studying financial aspect of green credit and regional heterogeneity on technology innovation in China.

This study examines the impact of green credit on digital technology innovation in China, focusing on the influence of financialization and regional heterogeneity. Existing research primarily explores factors like government subsidies, economic growth, and environmental regulations, and there is a lack of critical analysis on the influence of green credit on digital technology innovations. To examine the internal mechanisms linking green credit to digital technology innovation, this study uses panel data from 271 Chinese prefecture-level cities from 2000 to 2020. Our findings suggest that the availability of green credit and the level of financialization have a significant positive effect on technology innovation, particularly in regions with higher economic development. However, we also find that the impact of green credit and financialization on technology innovation varies across different regions of China. Study findings reveal that green credit bolsters both the quantity and quality of digital technology innovation, emerging as a significant driver for green innovations in China. This conclusion holds even after endogeneity tests. The heterogeneous analysis highlights that various aspects of green credit, such as coverage scope, usage intensity, and digitization level, can enhance digital technology innovations. Western cities demonstrate the most considerable positive effects, followed by central cities, while the weakest impact occurs in eastern cities. Green credit primarily promotes digital technology innovation indirectly by alleviating financing constraints. These empirical findings provide valuable policy insights for fostering a harmonious relationship between China's urban green credit facilities and green financial growth, thereby addressing the funding limitations green credit enterprises face.

ESG Scores and Environmental Protection Investment: Evidence from Listed Companies in China

The ESG concept has increasingly permeated the day-to-day management and strategic choices of companies in recent years. Within industries, regions and company sizes, all organizations have been allocating more resources to improving ESG. How does ESG scores affect corporate environmental investment? Exploring this question allow us to better understand the activities of corporate environmental investment, also be aware of the effectiveness of government's environmental regulation and industry regulation. Based on a panel of 615 Chinese listed corporates from 2019-2021 from CSMAR, the paper found: (1) For EPI of A-share listed companies, the amount was generally sufficient from 2019 to 2021, which is incompatible with previous discoveries. (2) There is a statistically significant relationship between the score of ESG and the amount of EPI. (3) The additional effect of centralized shareholding on the positive relationship remains unclear after robustness test. The findings above not only broaden the research perspective of EPI and ESG, but also enrich academic research on environmental management.

How Tripartite Stakeholders Promote Green Technology Innovation of China’s Heavily Polluting Enterprises?

Green technology innovation of heavily polluting enterprises is a critical way to alleviate environmental pressure and promote sustainable development. However, the ways in which the interaction of influencing factors affects heavily polluting enterprises in green technology innovation in China have not been fully addressed and need to be investigated in this field. This paper explored the impact of government environmental regulation, corporate social responsibility (CSR), and public attention on promoting green technology innovation of heavily polluting enterprises based on S-O-R (stimulus–organism–response) and stakeholder theories. The panel data of A-share listed companies in China’s heavily polluting industries from 2008 to 2020 was used to investigate their interactions by adopting POLS (Pooled Ordinary Least Square) method. The main results show that (1) environmental regulation has a significant positive effect on green technology innovation; it especially has a great impact on state-owned heavily polluting enterprises; (2) CSR plays a mediating role between environmental regulation and green technology innovation; (3) public attention has a moderating effect between CSR and green technology innovation and also moderates the indirect effect of environmental regulation on green technology innovation through CSR. The results illustrate that green technology innovation should be not only guided by governmental regulation, but also supplemented by enterprises’ internal driven force and public supervision, which can give implications for promoting the development of green technology innovation and optimizing environmental policy tools.

Complex Evolution Game and System Dynamics Simulation on the Impact of Coevolution on the Stability of the Fresh Agricultural Products Green Supply Chain

Although optimization of a fresh agricultural products supply chain has been widely studied, not much attention was paid to the impact of coevolution on the stability of such a supply chain, especially in the green development of such a supply chain. In this paper, based on the synergy theory and by considering the green development of the supply chain, with logistic model deduction of the trading volume of the supply chain as the system order parameter, system dynamics simulation is performed, showing the influence of the coevolution mechanism of various subsystems and the complex evolution game process on the stability of the supply chain. These results indicate that excessive coevolution among subsystems is not conducive to the supply chain when it enters a stable and orderly state. Only when the coevolution ability is controlled within a certain range can each subsystem achieve maximum profit. At the same time, the simulation results demonstrate the positive impact of coevolution on the stability of the supply chain. Sensitivity analysis shows that environmental factors such as the recycling rate of rotten products and the levels of government regulation and environmental ethics regulation have a positive impact on the stability of the supply chain, for which the larger the climate impact factor is, the less conducive it is to the stability. This research report provides some guidance for the sustainable development of the fresh agricultural products supply chain.

Local government competition, environmental regulation, and green development in China: Empirical analysis based on regional heterogeneity and path mechanisms

AbstractUsing China's interprovincial panel data from 2007 to 2019, this paper empirically investigates the relationship between environmental regulation and green development efficiency (GDE) by examining the local governments competition behavior. The main instruments of local government competition, involving taxation, government spending and attracting investment, are considered as well as the institutional context. Following the “performance‐output‐performance” to clarify the role of local government competition and environmental regulation on GDE, it is found that fiscal spending competition increases GDE, while tax and capital attraction competition play the opposite role; performance promoted inter‐governmental competition makes local governments' strategic choices between economic catch‐up and environmental protection volatile, and this volatility brings about fluctuations and losses in GDE. The study by regions finds that government competition and environmental regulation have a greater impact on GDE in the eastern and developed regions, while the impact on other regions is relatively small. Further, the mechanism setting and institutional improvement of environmental governance achieved significant results after 2013, but the function of local government competition mechanisms in improving environmental quality has not yet emerged in China. The findings based on the heterogeneity of regional economic development and path mechanisms provide a reference for social planners to carry out top‐level design in taxation, fiscal spending, and investment attraction, as well as to formulate differentiated regional environmental regulation policies.

Digital finance and inequality in renewable energy technology innovation

The development of renewable energy is a strategic deployment to address climate change and ensure energy security. Frontier research generally focuses on the impact of renewable energy development and technological innovation on environmental protection and neglects the inequality in renewable energy technology innovation. This paper constructs a renewable energy technology innovation inequality index and analyzes the impact of digital finance on renewable energy technology innovation inequality using panel data from 30 regions in China from 2011 to 2018. The study found that digital finance can alleviate inequality in renewable energy technology innovation. The mechanism test results show that digital finance can optimize green credit allocation, promote technology flow, and optimize energy consumption structure, thus reducing inequality in renewable energy technology innovation. Further analysis shows that the differences in local government governance, environmental regulation, financial supervision, marketization, digital divide, and renewable energy category affect the relationship between digital finance and inequality in renewable energy technology innovation. This paper clarifies the relationship between digital finance and inequality in renewable energy technology innovation and provides new ideas for renewable energy technology innovation.

Carbon reduction behavior of waste power battery recycling enterprises considering learning effects

The carbon reduction behavior of waste power battery recycling (WPBR) enterprises is essential for promoting resource conservation and environmental protection. Introducing the learning effects of carbon reduction research and development (R&D) investment, this study constructs an evolutionary game model between local governments and WPBR enterprises to study the behavior choice of carbon reduction. The paper explores the evolutionary process and factors affecting carbon reduction behavior choices of WPBR enterprises from internal R&D motivation and external regulation perspectives. The critical results reveal that the existence of learning effects significantly reduces the probability of environmental regulation by local governments while effectively increasing the probability of WPBR enterprises implementing carbon reduction. The learning rate index positively correlates with the likelihood of enterprises implementing carbon emissions reduction. In addition, carbon reduction subsidies considerably maintain considerably negative relation with the probability of enterprise carbon reduction behavior. The following conclusions are drawn: (1) The learning effect of carbon reduction R&D investment is the intrinsic driving force for WPBR enterprises' carbon reduction behavior, which can promote enterprises to proactively implement carbon reduction under fewer constraints of government environmental regulation; (2) Pollution fines and carbon trade prices in environmental regulation can promote enterprises carbon reduction, while carbon reduction subsidies inhibit their reduction behavior; (3) There exists an evolutionarily stable strategy between government-enterprise game only under the dynamic mechanism. The research provides insights for decision-making on enterprises' carbon reduction R&D investment and local government environmental regulation policy under carbon reduction targets.

The Response of Corporate Innovation to Climate Policy Uncertainty: Evidence from China

As the climate change risks’ effects on social development increase, how to deal with these challenges has become extremely urgent, and it is necessary for companies to adapt to the changing circumstances. This paper estimates the impact of climate policy uncertainty on corporate innovation using unbalanced panel data with 2,449 listed companies from 2009 to 2020. The findings show a significant positive correlation between climate policy uncertainty and corporate innovation investment. Specially, two possible mechanisms are explored. Government environmental regulations force companies to produce cleanly. Optimistic market expectations encourage firms to shift to a green development model. Further, the renewable energy industry and state-owned enterprises’ powers of innovation are more robust. Jointly, our findings offer the government a clear direction for policy making by identifying the effects of climate policy uncertainty on corporate innovation.

A study on the influence mechanism of public demand for environmental quality on government environmental regulation

ABSTRACT Public demand is an important factor influencing government decisions, and research on theoretical modelling of the impact of public demand for environmental quality on environmental regulation has been limited. In this paper, by constructing a dynamic optimization model, we derive the dynamic change mechanism of the impact of public demand for environmental quality on environmental regulation, and solve the optimal decision of environmental regulation. Further numerical simulation results show that public demand for environmental quality positively influences environmental regulation, and the influence coefficient curve between the two tends to be upwardly convex as the level of economic development increases, i.e. public demand for environmental quality influences environmental regulation to a greater extent. The research results provide theoretical model support for related studies, and the government should smooth the feedback channel of public demand for environmental quality and further optimize environmental regulations with the development of economic development level to achieve sustainable economic and environmental development.

Accountability audit of natural resource, government environmental regulation and pollution abatement: An empirical study based on difference-in-differences model

For many years, the lack of environmental supervision by local governments has been a challenge for China's environmental governance. In the process of promoting green development, the system of accountability audit of natural resource (AANR for short), which has a supervisory role, is an innovative policy attempt with Chinese characteristics, and pollution emissions are a key factor in assessing the effectiveness of the policy. Based on 2012–2017 panel data from 30 provincial regions, this research empirically investigates the effectiveness of AANR in treating pollution and improving air quality using the difference-in-difference model using the AANR pilot project launched in 2015. The results show that AANR can significantly reduce industrial wastewater and sulfur dioxide emissions and improve air quality in the long term. Meanwhile, AANR can improve the environmental regulating behaviour of local governments, which serves in part as an intermediate. This study recommends enhancing the necessary evaluation standards, promoting the standardisation and institutionalisation of AANR, and implementing big data audit techniques to further boost the promotion effect of AANR on pollution reduction. This research innovatively incorporates accountability audit of natural resource, government environmental regulation and pollution abatement into the same research system, providing theoretical and practical references for achieving green development and building a high-quality modern economic system.

Invisible economy, performance assessment of local governments, and environmental regulation in China.

Currently, environmental regulation in China is characterized by partial improvement and overall deterioration of the environment. To investigate the impact of China's environmental regulation on the country's environment, we consider the invisible economy by constructing a Stackelberg game model between local governments and polluting enterprises based on the Chinese institutional structure. We derive the following findings: (1) Increasing the invisible economic production scale causes the enterprise to reduce the pollution control level, resulting in increasing total pollutant emissions. Increasing the invisible economy production scale increases the enterprise's profit but undermines the utility of the local government. (2) The higher the proportion of environmental performance in the performance assessment of the local government is, the greater is the incentive for the local government to regulate the environment, which can force the enterprise to improve the pollution control level. However, there is an inefficient range for the proportion of environmental performance. (3) The lenient the pollutant emissions limit is, the weaker is the local government's environmental regulation intensity and the enterprise's pollution control level. (4) The higher the unit fine levied on the enterprise for excessive emissions is, the lower is the environmental regulation intensity of the local government, which can bring about improvement in the enterprise's pollution control level and reduction in total pollutant emissions. The results of the study have positive effects on sustainable environmental regulation in China under the invisible economy.