High-polluting Industries Research Articles

How does carbon emission trading scheme affect enterprise green technology innovation: evidence from China's A-share non-financial listed companies.

More and more emphasis is placed on the common development of economy and ecological environment in China's development strategy, and one of the key solution is green technology innovation of enterprises. This paper takes the carbon emission trading scheme carried out in China in 2013 as a quasi-natural experiment and uses the data of China's A-share non-financial listed companies and the DID method to empirically test the impact of the scheme on enterprise green technology innovation from the micro level. The results suggest that the carbon emission trading scheme has a significant role in promoting enterprise green technology innovation, mainly through the innovation of green practical patents and alternative energy-based patent. Using a series of robustness tests such as dynamic effect test, placebo test, and PSM-DID, it is found that the results are still valid. Further analysis finds that debt financing will weaken the role of carbon emission trading scheme in promoting enterprise green technology innovation. And the carbon emission trading scheme plays a greater role in promoting green technology innovation in state-owned enterprises, enterprises belonging to areas with strong pollution control intensity and high pollution industry.

How does manufacturing haze pollution decrease in China: a decomposition study of structural model based on general equilibrium framework.

Based on the annual mean PM2.5 concentration data of 30 provinces and cities in China from 2006 to 2020, this paper constructs a structural model of manufacturing haze pollution, expounds the main mechanisms affecting haze pollution, then statistically decomposes the main factors affecting the change of pollution emissions, and examines the direct and indirect impact paths of the change of haze pollution emissions in China. The study found that (1) the inhibitory effects of latent variables on manufacturing haze pollution is from strong to weak in order: industrial structure upgrading, environmental regulation, trade opening, productivity improvement, and economic scale expansion, while the optimal path for the indirect effect of exogenous latent variables on haze pollution is to rely on environmental regulation and opening up to achieve the improvement of productivity, so as to achieve the purpose of reducing haze pollution. (2) The analysis based on the PVAR model found that industrial structure adjustment is the key factor of haze decline in both the short and long term. Environmental regulation has an obvious effect on haze control in the short term, but in the long run, it still needs to rely on industrial structure adjustment, production efficiency improvement, and trade opening to achieve the goal of reducing haze. (3) There is an inverted U-shaped nonlinear relationship between output scale and environmental regulation. In addition, trade openness has a long-term effect on productivity. Technology spillovers from opening up can reduce haze pollution in the long run by improving productivity. (4) The environmental regulation policy in the central region is characterized by "race to the bottom," while the eastern region shows the characteristic of "race to the top" in the policy game of improving productivity and optimizing the industrial structure. Therefore, haze control requires an appropriate intensity of environmental regulation to reduce the proportion of high pollution and high energy consumption industries. Make full use of the international cooperation platform of the "the Belt and Road Initiative" and the pilot free trade zone to promote substantive cooperation between Chinese enterprises and developed countries in the field of environmental protection technology, increase investment in research and development of clean equipment and cleaner production technology, improve productivity, help China's green manufacturing, and contribute Chinese wisdom and Chinese solutions to global environmental governance and climate change.

Does innovation save more energy? Evidence from Chinese Firms

How to improve energy efficiency is vital under the dual carbon target, and has been one of the central topics for economists and policymakers. Relying on the novel merged data at the firm level in China, we investigate the role of innovation activities on firms’ energy usage. The results show that innovation indeed promotes energy efficiency, and further, the patent with higher quality shows larger promotion effect. In addition, this paper provides heterogeneity tests, and find that the promotion effect of patent on energy efficiency is only valid for state-owned, private, and foreign firms. Meanwhile, the marginal effect is highest in western area but lowest in the eastern area. Then, we examine the mechanism of the energy-saving effect, and that effect is more pronounced in high-tech and high-pollution industries. The policy implication is obvious that the speed up of innovation-led growth can benefit the energy efficiency improvement.

Trade policy uncertainty and environmental performance of Chinese enterprises

Using the data of micro industrial enterprises and the quasi-natural experiment of the permanent normal trade relationship (PNTR) authorisation from the United States after China's accession to the World Trade Organization, this study investigates the impact of trade policy uncertainty (TPU) on enterprise environmental performance employing the difference-in-differences model. We found that the sulfur dioxide (SO2) emissions of enterprises in an industry with a large reduction in TPU after China obtained the PNTR authorisation will be reduced more than those of enterprises in an industry with less TPU reduction. The decline in TPU helps reduce SO2 generation and strengthen enterprises’ pollutants removal, thereby improving enterprises’ front and terminal environment performance. Under strong environmental regulation by local governments, the decline in TPU is conducive to improving enterprises' environmental performance. The impact of TPU decline mainly exists in the enterprises of high pollution industries, non-state-owned and the eastern area.

Environmental justice and green innovation: A quasi-natural experiment based on the establishment of environmental courts in China

Environmental justice is a more sustainable constraint on polluting behavior than administrative instruments. Previous literature has explored the impact of various administrative instruments applied to environmental regulation on green innovation but has neglected the possible role of environmental justice. This paper examines the effect of environmental justice on green innovation using the multi-period difference-in-difference (DID) approach by taking the establishment of the Chinese environmental court as a policy shock, thus filling the gap in previous studies. We conclude that: first, the establishment of environmental courts significantly contributes to the level of green innovation. This finding holds after a series of robustness tests. Second, environmental justice pushes polluters to engage in green innovation through the mechanism of pollution control. Third, the effect of environmental courts on green innovation is not significant in resource-based cities, which depend more on high-polluting industries for development. Fourth, a better legal environment can help improve the effectiveness of environmental justice in promoting green innovation. This paper not only supplements the existing literature on the factors influencing green innovation and explains the operational mechanisms and effects of environmental justice, but also provides theoretical support for promoting green innovation in practice.

Robot adoption and green productivity: Curse or Boon

Recent studies demonstrated that robotics has improved efficiency in several fields, but they seem to ignore the fact that replacing human labor with robots may lead to extra energy consumption, which will raise concerns about more serious environmental problems. In this paper, we use a combined data set to explore the relationship between robot adoption and green productivity. The result shows that the adoption of robots in production does lead to new pollution sources, but there is no direct evidence that the rebound effects will threaten green productivity, and the existence of scale compensation is instead conducive to a transformation towards cleaner production modes. More importantly, using robots to replace human labor means improvements in energy efficiency and positive market selection effects, all of which can help to boost green productivity. Therefore, robot adoption is a boon for green productivity rather than a curse, and they have been proved to be beneficial even in regions dominated by high pollution industries despite green productivity gains inequality. Our findings provide new evidence for the green-biased character of robotics and new thoughts for understanding the environmental outcomes of robot adoption.

Research on the influence mechanism of coordinated development of Beijing–Tianjin–Hebei local economy and high haze pollution industries such as thermal power

The unbalanced industrial development in Beijing, Tianjin and Hebei leads to the economic development with increasingly prominent environmental problems, which is not conducive to the coordinated development of Beijing, Tianjin and Hebei. This research constructs a composite multiple mediation model with government factors as independent variables, market factors, technological innovation, and location factors as mediating variables, and coordinated development as outcome variables to conduct an empirical study. The PLS-SEM method was used to evaluate and test the initial model and the modified model. After several fittings, the optimal model is obtained, the study found that the mediating effect value of technological innovation was the largest between government factors to coordinated development effects, followed by the mediating variables location factors and market factors. It is recommended to build a common research and sharing mechanism for green technological innovation in pollution reduction and accelerate the speed of transformation of green achievements; build an internal and external construction mechanism based on thermal power and other high haze pollution industrial systems to improve the proportion of high quality population; build a financial hierarchical expenditure guarantee mechanism and strive to create an environment open to foreign business.

Technological innovation and the complexity of imported technology: Moderating effects based on environmental regulation

The complexity of imported technology is an essential expression of structural optimization of import trade. Achieving high-quality import opening through import technology complexity under stricter environmental regulations and the increasing urgency of technological innovation has essential theoretical and practical significance. Given this, based on multiple database matching, this paper studies the effect of technological innovation on the complexity of imported technology and the mechanism of environmental regulation on this effect from the dimension of provincial-import source-manufacturing products (HS6). The results show that technological innovation has a positive impact on the complexity of imported technology, and environmental regulation can strengthen the positive impact of technological innovation. The moderating effect of environmental regulation is significant and differentiated at the regional and industry levels. The strengthening effects are more critical in eastern China and high pollution industries. These conclusions provide a theoretical and empirical basis for encouraging technological innovation and introducing differentiated environmental policies.

Environmental Regulation, Family Involvement and Green Innovation Efficiency—Based on Sew Theory Framework

The green innovation of family enterprises under environmental regulation is essentially the balance between emotional benefits and emotional costs, which manifests as the reputation incentive and risk aversion, respectively. The reputation incentive refers to inheriting extended social–emotional wealth, and risk aversion means maintaining constrained social–emotional wealth. Based on the theoretical framework of social–emotional wealth, this paper selects 3006 family enterprises in China from 2015 to 2020, establishes a panel model of fixed effects, and discusses the impact of environmental regulation on the green innovation efficiency in family enterprises from the perspective of family involvement. The findings indicate that command-based environmental regulation promotes green innovation efficiency in family enterprises, while market-based environmental regulation inhibits the green innovation efficiency of family enterprises. The involvement of family ownership strengthens the positive effect of command-based environmental regulation on green innovation efficiency, while the involvement of family management rights strengthens the negative effect of market-based environmental regulation on green innovation efficiency. Through mechanism analysis, it is found that command-based environmental regulation promotes green innovation efficiency in family enterprises through reputation incentives, while market-based environmental regulation reduces the green innovation efficiency of family enterprises by avoiding risks. Further analysis shows that high-competition and high-pollution industries are more significantly affected by the relationship between them. Therefore, this paper proposes improvements to green innovation efficiency in family enterprises based on the adjustment of four aspects: improving the risk management level, consolidating family control, increasing the shareholding ratio of nonfamily shareholders, and giving full play to the role of reputation incentives to achieve the sustainable development of family enterprises. Furthermore, we strive to contribute to the realization of the dual carbon goals and the United Nations Sustainable Development Goals (SDGs).

The pollution haven strikes back?–Evidence from air quality daily variation in the Jing-Jin-Ji region of China

Pollution havens create environmental inequality issues. China’s recent policy of directing high-pollution firms to migrate out of its capital, Beijing, offers a case of a pollution haven that was mandated, rather than resulting from firms’ responses to environmental regulation. More importantly, it leads to a question that has been less discussed in previous literature: does a pollution haven strike back? After the highly polluting enterprises moved out of Beijing to neighboring Hebei province, Hebei has been blamed for the continuing poor air quality in Beijing, based on a perception that the pollutants emitted in Hebei are being blown back to Beijing. This paper investigates the existence of a pollution haven in Hebei and quantifies the contribution of Hebei’s emissions to Beijing’s air quality. We find that the proportion of output values and the relative concentration of high-pollution industries in Hebei increased when the large-scale out-migration began, while the indicators in Beijing decreased. We also find higher emissions of enterprises in Hebei than their counterparts in Beijing. Together, these findings indicate the existence of a “manmade” pollution haven. Further, based on high-frequency spatial data, we combine an Autoregressive Distributed Lag model and a Spatial Autoregressive Model and decompose the factors that affect Beijing’s air quality into local and regional transport of air-borne pollutants. We find a significant effect of the neighboring cities’ air pollution on Beijing’s air quality. This indicates that the pollution haven indeed struck back. These findings imply the importance of regional policies to control air pollution.

Effects of air pollution on accounting conservatism

We examine the impact of air pollution on a firm's accounting policy conservatism. We hypothesize that, in response to risks associated with increased air pollution, firms apply more conservative accounting practices and utilize more conservative estimates in their reporting. Using a sample of Chinese firms, accounting conservatism measures, and a satellite-based air pollution metric, we confirm the validity of our hypothesis. Additional analysis suggests that the impact of air pollution on accounting policy conservatism is more salient for firms in high-pollution industries, firms under severe financial constraint, firms with higher environmental risk, and firms that receive high media coverage. Further, we document that air pollution does not significantly affect a firm's return on assets, year-on-year sales growth, or Tobin's Q measure. Hence, it is management's risk perception, not objective performance concern, that is driving accounting conservatism. Finally, specifically investigating accounting conservatism, we discover that, for firms with higher pollution levels, selling general and administrative expenses, liabilities provision, accrued expenses, and asset impairment loss are significantly higher.

Study on the effect of carbon trading regulation on green innovation and heterogeneity analysis from China

China launched seven pilot areas for climate change mitigation before establishing a unified carbon emissions trading system in 2014. To explore the heterogeneous effect of carbon trading regulation on green innovation in China, we constructed evolutionary games with players of governments and enterprises. We then conducted empirical studies with the difference-in-difference model. With the data of listed Chinese A-share companies from 2008 to 2018, we found that implementing carbon trading pilot projects in China significantly increases the green innovation output of enterprises in the pilot regions. Additionally, the sensitivity to carbon trading policies varies across industries and property rights. Regarding the quality of green innovation triggered by the pilot project, firms in the pilot regions prefer high-quality green invention patent innovations over low-quality green utility model patent innovations. In addition, state-owned enterprises tend to apply for high-quality green invention patents, while firms in high-pollution industries prefer to apply for lower-quality green utility model patents. Finally, we put forward policy suggestions. First, China should accelerate the pilot carbon trading regulation and expand its scope. Second, there should be regional and industrial differences in constricting carbon trading regulations. Third, the government should avoid unreasonable regulatory intensity design.

Research on Spatial Distribution Characteristics of High Haze Pollution Industries Such as Thermal Power Industry in the Beijing-Tianjin-Hebei Region

The Beijing-Tianjin-Hebei region is subject to the most severe haze condition in China. Against the backdrop of the coordinated development of Beijing, Tianjin, and Hebei, it is of great significance to explore the space-time distribution characteristics of high haze pollution industries in the above region. The purpose of this article is to find high haze pollution industries scientifically, analyze the spatial distribution characteristics of high haze pollution industries in Beijing-Tianjin-Hebei correctly, and formulate effective reduction measures for the spatial distribution of high haze pollution industries in different regions of Beijing-Tianjin-Hebei. It hopes that the measures provide a basis for effective to reduce high haze pollution in the Beijing-Tianjin-Hebei region. Using the Gini coefficient and location entropy, this paper explores the space-time characteristics of high haze pollution industries in 13 cities of the Beijing-Tianjin-Hebei region. The results show that those aforesaid high haze pollution industries present an obvious clustering trend in Beijing, Tianjin, Shijiazhuang, Handan, and some areas along the economic axis of China, overall flooding into Eastern coastal and Southern inland areas. By industry, the petroleum processing and coking processing industry, chemical raw materials and chemical products industry, manufacture of non-metallic mineral products, and ferrous metal smelting and rolling processing industry witness a declining clustering trend, as opposed to the electricity, heat production, and supply industry. Meanwhile, core cities of the Beijing-Tianjin-Hebei region have developed high haze pollution industries, and the hinterland lags in economic development. It is necessary to face up to the differences in economic development among areas in the Beijing-Tianjin-Hebei region, promote the staggered development of high haze pollution industries, and build a high haze pollution industry chain with coordinated economic and environmental development, thus reducing the economic gap with each area, and realizing the coordinated development of economy, industry, and environment.

Climbing the quality ladder of green innovation: Does green finance matter?

As the second-largest economy in the world with both high-energy consumption and high‑carbon emission, China has launched several green finance pilot zones (GFPZ) targeting regional sustainable development goals (SDGs). Despite critical policy significance, whether and how green finance affects green innovation by enterprises still remains not well understood. Hence, using a difference-in-difference identification strategy and a micro-sample of A-share Chinese listed enterprises during 2007–2019, we investigated the aggregate casual effects of the GFPZ policy on green innovation quality. The empirical results show that the GFPZ policy has incentive and restraint effects on the enterprises' green innovation behavior. It substantially restricts enterprises from engaging in low-quality green innovation and encourages them to spur high-quality ones in the long run. Furthermore, we explore three plausible channels that may explain this beneficial effect; mitigating financial constraints, reducing transaction costs and intensifying peer-to-peer competition in research and development (R&D). In addition, this effect is more pronounced for sub-samples of high-polluting industries, non-state-owned enterprises, and small, medium and micro enterprises. We further show that high-quality green innovation is a plausible mechanism that links green finance with regional green development through enhancing green productivity growth. Overall, these findings provide new insights into the real effects of green finance on green innovation and productivity growth in the context of SDGs.

How does the digital economy promote green technology innovation by manufacturing enterprises? Evidence from China

With the rapid development of the digital economy and the increasingly severe environmental issues, the role of the digital economy in green innovation has been attracting more attention; however, only a limited amount of research has been done in this area. Therefore, based on matching data at the city and manufacturing enterprise level in China during 2011–2018, this paper attempted to integrate the digital economy (more specifically, the Internet and digital finance) with resource allocation and green technology innovation together in a unified scheme. Our study confirmed that the digital economy could significantly promote green technology innovation by manufacturing enterprises, but that digital finance was the dominant feature. Resource allocation efficiency played a partial mediating role between digital economy and green technology innovation. Furthermore, considering the heterogeneity in enterprise ownership and industrial pollution, the digital economy had a more positive effect on green technology innovation in state-owned enterprises (SOEs) and high pollution industries. As for the heterogeneity of region, the Internet significantly contributed to green technology innovation in regions with different levels of development. In the eastern region of China, especially, the influence of digital finance on green technology innovation was more significant. In view of these findings, this study provides important insights for strengthening the integration of the digital economy with green transformation, emphasizing the rationality of resource allocation, and formulating policies for different enterprises.

Does digital finance promote the green innovation of China's listed companies?

As the world's largest manufacturing country, China has been the object of considerable concern for the international community, specifically with regard to China's environmental pollution and carbon emissions. Meanwhile, the rise of digital finance in China has been having an increasingly extensive impact. In this context, this research is devoted to testing the role of digital finance in promoting green innovation; this is done by using the 2011 to 2018 data of Chinese A-share listed companies. The baseline results show that, on average, every 1% increase in digital finance will lead to a 0.82% increase in green innovation, with a significant level of 1%. After changing the measurement method of core explanatory variables, removing samples from the financial industry, further adding control variables at the regional level, and using instrumental variable regression, the baseline results stay robust. Further dynamic analysis shows that digital finance has a lasting promoting effect. A mechanism analysis shows that digital finance alleviates the financing constraints of listed companies and improves the overall innovation of the relevant city, thus improving green innovation ability. The positive impact of digital finance is more prominent in state-owned enterprises, economically-developed eastern regions, and high-pollution industries. Meanwhile, digital finance also retains a certain degree of significance in private enterprises, central and western regions, and low-pollution industries. This work provides empirical evidence of China's high-quality development based on digital finance. The results also have implications for major global economies in terms of meeting their carbon targets.

CEO Geographic Origin and Corporate Environmental Irresponsibility

Although research on place attachment and place identification shows that place of origin greatly influences people’s cognitions, emotions, and behaviors, strategic management scholars have paid limited attention to how CEO place of origin influences strategic decision making. Building upon theories and studies about place attachment and place identification, we explain why Chinese CEOs are especially likely to have strong home province attachment and home province identification. We then predict that a Chinese firm’s corporate environmental irresponsibility (CEIR) in its headquarters province will be reduced if the province is the CEO’s home province. In addition, we propose that the negative effect of CEO home province on CEIR will be stronger when the CEO’s home province has better scenic quality but weaker when the CEO’s home province has more pollution. Moreover, we predict that the negative effect of CEO home province on CEIR will be strengthened by the CEO’s board and political appointments in the home province. Using longitudinal data (2008-2018) covering 637 Chinese public firms in 18 high-pollution industries, we find strong support for our hypotheses. Our findings are robust to alternative measures of key variables, units of analysis, methods of estimation, and the potential presence of omitted variables.

Low-Carbon Transition of Enterprises and Financial Market Stability: From the Perspective of Stock Price Crash Risk

ABSTRACT This study aimed to assess the effect of corporate low-carbon transition on financial market stability. For this purpose, this study used the panel data of nonfinancial companies listed on China’s A shares from 2007 to 2020, considering stock price crash risk. The results revealed that the low-carbon transition of enterprises intensifies the risk of stock price crashes. The positive correlation between the low-carbon transition of enterprises and the stock price crash risk is more significant for companies lacking environmental information disclosure and green innovation, in addition to companies in high-polluting industries and noncarbon emission pilot areas. The conclusions were confirmed to be robust by introducing other control variables into the model, conducting instrumental variables test, and using the difference-in-differences method.

Political Sensitivity and Carbon Emissions: Evidence From a Quasi-Natural Experiment of Leadership Change in China

While there is extensive literature assessing the impact of command-and-control and market-incentive environmental regulation on carbon emissions, it overlooks the fact that command-and-control environmental regulation and market-incentive environmental regulation are the embodiment of the national concept of green development. When a national leader with a green development philosophy is in power, local governments (due to the competition among them) adjust the economic development strategies and targets in their jurisdictions according to the leaders’ philosophy, resulting in differences in urban carbon emissions. Based on Chinese urban panel data from 2010 to 2016, this study uses a difference-in-differences approach to assess the impact of a national leader with a green development philosophy in power on carbon emissions in cities with different political sensitivities and the mechanisms of the impact. Our study finds that after the change in national leadership, the carbon intensity of high politically sensitive cities decreases significantly compared to low politically sensitive cities. We further find that increasing urban green areas and limiting the development of high-polluting industries are two ways to reduce carbon emission intensity in highly politically sensitive cities. A heterogeneity test demonstrates that the higher the level of economic development of the region where the city is located, the fewer the number of industrial enterprises in the city, the lower the total industrial output value of the city, and the more domestic enterprises in the city, proving that the change of national leaders more significantly impacts the city’s carbon emission. Our study suggests that policymakers should pay careful attention to the system of appraisal of officials, urban greening and development of highly polluting industries, and differentiated environmental policies.

Analysis of the impact of resource constraint on export trade of Chinese metal products industry

In the era of "green economy", how to maintain rapid economic growth under the constraints of resources is one of the hot issues concerned by the government and experts. With the acceleration of economic globalization, the trend of international transfer of industries is becoming more and more obvious. China is a country with relatively rich resources and low labor costs. In recent years, China has gradually become a resource-intensive undertaking country characterized by high pollution and high energy consumption industries. The transfer of international industries has not only greatly promoted the development of China's economy, but also further increased the demand for resources in China. To realize the sustainable growth of economic development, we must adjust the relationship between trade and resources. Metal products industry belongs to China's manufacturing industry, and it is also a typical industry with high energy consumption and high pollution, which is bound to face severe resource constraints in future construction. Therefore, this paper takes resource constraint as the basic condition, discusses the influence of China's metal products industry under the new situation, analyzes the influence mechanism of resource constraint, and puts forward relevant policy suggestions.