Impact Of Environmental Regulation Research Articles

The impact of environmental regulation on firms’ markups: evidence from China

ABSTRACT A comprehensive evaluation of the costs and benefits of environmental regulations provides empirical evidence for policymakers to formulate and introduce environmental policies. Firms’ profitability and competitiveness manifest their market power and provide the micro foundation for economic development and social stability. Therefore, this paper focus on investigating the impact of air pollution environmental regulation on manufacturing firms’ market power, measured by markups, with a difference-in-differences (DID) method. Using air pollution control policy, requiring China’s Key Cities for Air Pollution Control (KCAPC) to meet air quality standards within a specified time limit as a natural experiment, our DID estimations show that air pollution regulation significantly leads to an increase in firms’ markup rate by 0.002 in key cities that did not meet air quality standards. Heterogeneous effects show that this impact is larger for polluting firms, private-owned and foreign-owned firms, and firms located in western and central cities and cities with high marketization. Productivity and market share may be two main influencing channels to explain the positive impact of air pollution environmental regulation on firms’ markups. Our findings suggest that strengthening environmental regulation is conducive to improving the competitiveness and market power of manufacturing firms, lending support to the enforcement of environmental regulations.

Is the impact of environmental regulations on the global value chains biased towards technological effects or refuge effects?

As an important factor endowment, environmental rules have a non-negligible impact on trade flows and patterns. Regarding the existing two completely different debates, this study uses simultaneous equations and the Spatial Durbin Model (SDM) to assess the interaction and spatial spillover effects of environmental rules and global value chains (GVCs), the aim is to determine whether the impact of environmental rules on GVCs is biased towards “technological effects” or “Refuge effect”. The research findings reveal: (1) When the environmental rules are strengthened by 1 %, the forward participation of GVCs in developed countries decreases by 0.2930 % and the backward participation of GVCs increases by 1.4327 %. This reveals that stricter environmental rules result in GVCs participation bias towards the “refuge effect” in developed countries. (2) When environmental rules are strengthened by 5 % and 1 %, respectively, the GVC forward and backward participation of developing countries decreases by 0.0477 % and 0.5113 %, respectively, which means that when the environmental rules become stricter, both the forward and backward participation of GVCs in developing countries are biased towards the “refuge effect”. (3) Concerning the spillover effects of environmental regulations on participation in GVCs, stricter environmental regulations in developed countries impede their own forward participation in GVCs but promote their backward participation, with insignificant indirect effects. Additionally, stringent environmental regulations in developing countries impede their own forward participation in GVCs and similarly do not contribute to the enhancement of forward participation in neighboring developing countries. Therefore, this study suggests that developed countries can transfer green technology to developing countries through technology transfer agreements to promote mutual development. Moreover, developing countries actively adjust their industrial structure, increase investment in technology R&D, and cooperate with other countries and regions, which will help countries learn from best practices and coordinate their responses to common environmental challenges.

The Impact of Environmental Regulation and Technical Cognition on Farmers’ Adoption of Safety Agro-Utilization of Heavy Metal-Contaminated Farmland Soil

The Impact of Environmental Regulation and Technical Cognition on Farmers’ Adoption of Safety Agro-Utilization of Heavy Metal-Contaminated Farmland Soil

Impact of environmental regulations and environmental provisions on trade

Impact of environmental regulations and environmental provisions on trade

The impact of environmental regulation on green investment efficiency of thermal power enterprises in China-based on a three-stage exogenous variable model

Due to the increased frequency of extreme weather events and the implementation of the China’s dual-carbon target, thermal power companies have been under pressure to construct green infrastructure and to actively pursue low-carbon transformation in response to stricter environmental regulations. This research thus selects 30 listed thermal power enterprises in China as study objects and assesses their green investment efficiency in the low-carbon transition process using three-stage DEA evaluation model with environmental regulation as an exogenous variable. Based on this, a benchmark regression model is used to corroborate the relationship between environmental regulation and green investment. Simultaneously, we carry out analysis to compare the correlation between thermal power firms’ green investment efficiency and their focus on green investments. The results show in terms of total efficiency that environmental regulation significantly improves the total efficiency of 80% of thermal power enterprises compared to the absence of this exogenous variable. With the addition of environmental regulation, firms’ total efficiency declines gradually in general from 2018 to 2022, with the mean value of efficiency falling by 0.068. In terms of stage-specific efficiency, the efficiency of the green investment stage of the majority of firms is between 0.3 and 0.6, which is much lower than that of the operational stage and the market performance stage. In terms of sub-indicator efficiency, both green investment efficiency and social donation efficiency among thermal power enterprises show obvious polarization, with 30% of them having an efficiency of 1 and 30% less than 0.1. In terms of green investment focus, thermal power unit renovation has a more obvious role in boosting the green investment efficiency of thermal power enterprises than do wind power and photovoltaic projects. Therefore, both governmental departments and thermal power enterprises need to take active measures in order to achieve green transformation from the perspective of green investment efficiency. Through the segmentation of important projects of green investment, this paper provides a reasonable investment direction reference for the sustainable transformation of China’s thermal power industry. It also provides a rich and novel theoretical basis for the Chinese government to further improve the relevant environmental protection laws and regulations of thermal power industry.

Impact of Environmental Regulation on Corporate Green Technological Innovation: The Moderating Role of Corporate Governance and Environmental Information Disclosure

Environmental degradation is an important issue facing the world today. Microcosmically, green technical innovation is needed to decrease environmental pollution. Therefore, exploring the relationship between the two is of great significance for promoting environmental protection and sustainable development. Thus, this research elucidates the interaction between green innovation (GI) and environmental regulations (ERs). This study utilizes the fixed effects model to examine how government environmental protection subsidies (EPSs) in market-incentive ER and environmental management system certification (EMSC) in voluntary participatory ER affect GI among listed companies in China. The sample observation period is from 2012 to 2021. Additionally, the impact of corporate governance (CGL) and environmental information disclosure (EID) on the relationship between ERs and GI within businesses is investigated. The empirical results show that both government environmental protection subsidies and environmental management system certification positively affect green innovation, and both corporate governance and environmental information disclosure positively moderate the impact of government environmental protection subsidies and environmental management system certification on green innovation. The above empirical results are still valid after a robustness test and can guide the formulation of government ERs, as well as corporate strategies for environmental management and GI.

Environmental regulations and corporate cash holdings

The impact of environmental regulations on corporate performance and decisions has attracted significant attention from academics, practitioners and policymakers. We extend this line of research to examine the impact of regional environmental regulations on firms’ cash holdings. We find that environmental regulations motivate firms to increase cash holdings. Further analyses reveal that firms increase cash holdings due to having less debt financing, decreased sales and more green innovation, all caused by environmental regulations. Under regulatory pressure, firms operating in more competitive industries, facing more financial constraints, having more environmental expenditure and belonging to the secondary sector tend to hold more cash than other firms, while firms with better CSR performance do not maintain as high cash holdings as their counterparts. We further demonstrate that increased cash holdings caused by the imposition of environmental regulations increase firm value.

Research on the impact of environmental regulations on green technological innovation in China from the perspective of digital transformation: a threshold model approach

The digital transformation in developing countries is crucial in determining whether environmental regulations can better facilitate green technological innovation. This paper constructs a theoretical model to deduce the relationships among digital transformation, environmental regulations, and green technological innovation. Empirical research is conducted using a two-way fixed-effects model and a threshold regression approach, based on provincial panel data from China spanning the years 2013 to 2020. The results indicate that environmental regulation inhibits green technological innovation. However, digital transformation, by reducing cost pathways, can promote the efficiency of green technological innovation under environmental regulation. This moderating effect exhibits a nonlinear threshold characteristic. Regarding dimensions of digital transformation, the level of digital investment shows no threshold, while both the level of digital application and the scale of digital integration exhibit threshold effects. Presently, in China, digital transformation effectively incentivizes green technological innovation under environmental regulation. Therefore, increasing digital investment, advancing digital applications, and fostering digital integration are inevitable choices to drive green technological innovation under the pressure of environmental regulation.

The impact of environmental regulations on the upgrading of the industrial structure: Evidence from China

China's economy has transitioned into a phase of high-quality development, with enhancing its industrial structure becoming a critical objective. We gathered panel data from 30 major provinces in China from 2010 to 2020 and employed the fixed effects model to assess the actual influence of environmental regulations on industrial structure upgrading. Our empirical findings show that the impacts of various environmental regulations on industrial structure upgrading in China are significantly different. Mandatory environmental regulation demonstrates an inverted U-shaped nonlinear correlation with the upgrading level of the entire industrial structure. When the intensity of this regulation is low, it significantly accelerates industrial structure upgrading. As the intensity of this regulation rises, its effect on industrial structure upgrading is inhibitory. In contrast, induced environmental regulation exhibits a nonlinear U-shaped relationship with industrial structure upgrading and shows a nonlinear change trend of first decreasing and then rising. When the intensity of induced environmental regulation reaches a certain critical point and continues to increase, it will change from a negative influence on the upgrading of the industrial structure to a promoting effect. The further discussion of threshold regression and the robustness test also led to similar conclusions. The above research is conducive to the Chinese government's rational use of environmental regulation tools to promote industrial structure upgrading. It is also beneficial to developing countries, allowing them to learn from China's experience to improve the effectiveness of environmental regulation and boost their industrial development.

Impact of Environmental Regulation on Export Technological Complexity of High-Tech Industries in Chinese Manufacturing

Since the reform and opening-up, China has developed into the world’s number one manufacturing country. Meanwhile, China’s environmental protection efforts continue to strengthen. So, will changes in the intensity of environmental regulatory policies have an impact on the technological development level and international competitiveness of China’s high-tech manufacturing industries? In response to this issue, we have reviewed relevant research in the field of environmental regulation and export technology complexity, and then selected appropriate indicators to quantify the environmental regulation and export technology complexity of high-tech manufacturing industries in different regions of China. Furthermore, the entropy method was used to calculate the intensity of environmental regulations in different regions of China. In the subsequent empirical analysis, based on relevant indicator data from 30 provinces in China, excluding Tibet, from 2006 to 2021, we quantitatively analyzed the impact of China’s environmental regulations on the complex export technology of high-tech manufacturing industries. The degree of influence and the robustness of the benchmark regression results was proved through endogeneity testing and robustness testing. The main conclusions are as follows: (1) from 2006 to 2021, China’s environmental regulation intensity and the technological complexity of high-tech industry exports have shown an upward trend. (2) The empirical analysis results show that the increase in intensity has a significant “U-shaped” impact on the technological complexity of exports of high-tech manufacturing industries. (3) The “U-shaped” impact of environmental regulation on the technological complexity of exports of high-tech manufacturing industries has regional differences. However, the high-tech manufacturing industry does not show obvious industry differences. (4) Environmental regulations will affect the level of export technology complexity of the high-tech manufacturing industry through foreign direct investment, human capital, and innovative R D investment, which cause indirect effects. Based on those conclusions, this paper has suggested corresponding policy measures and future research directions.

The Impact of Environmental Regulation on Technological Innovation of Enterprises: Based on Empirical Evidences of the Implementation of Pollution Charges in China

Abstract Environmental protection is closely related to high-quality economic developments. Based on the matching of micro-databases from 2000 to 2008, this study used the “Regulations on the Collection and Use of Pollution Fees” policy implemented in China in 2003 as the exogenous impact to construct the intensity Difference in Differences model in order to investigate the effects of pollutant discharge fee on technological innovation of enterprises and the underlying mechanisms. The results showed that governmental environmental regulations significantly improved the level of technological innovation of enterprises, and the conclusion was still valid after a series of robustness tests. The results of the parallel trend verified the rationality of the differential setting and the dynamic effects showed that the pollutant discharge fees had a continuous promoting effect on the technological innovation of enterprises. The results of the placebo tests rejected the original hypothesis of the mistaken model. The mechanism verifications revealed that the strengthening of environmental regulation by the government acted on the innovation level of enterprises through the two mechanisms, i.e., the promotion of enterprises’ fixed asset investments and government subsidies, and finally improved the enterprises’ technological innovation levels.

Effects of carbon emission trading system on corporate green total factor productivity: Does environmental regulation play a role of green blessing?

Extant studies focus on the impact of environmental regulation on regional economic growth or environmental pollution, and a lot of research outcomes have been made. However, from the perspective of corporate green sustainable development, the question of whether carbon emission trading represents a “green blessing” remains unclear. To address this issue, we employ a staggered difference-in-differences model to investigate the effects and mechanisms of the carbon emissions trading pilot policy (CETPP) on the green total factor productivity (GTFP) of listed manufacturing companies in China. Our results demonstrate that: a) CETPP can effectively promote corporate GTFP, and the robustness of this result is verified through a series of checks; b) the mediating role of environmental, social, and governance (ESG) performance is critical in the relationship between CETPP and corporate GTFP, with environmental and governance performance serving as two key transmission channels; and c) CEO green experience and public environmental concern both play the moderating roles on the relationship between CETPP and GTFP; d) CETPP has a stronger positive impact on GTFP of private enterprises and enterprises in the maturity life cycle; and e) CETPP has a spatial spillover effect on GTFP, and the effect will decay as spatial distance increases. Our study offers both theoretical and practical implications for enterprises to achieve their green economic development objectives, so as to promote China's high-quality development.

The Role of Industrial Structure in the Impact of Environmental Regulation on Carbon Productivity

In the context of global climate change, China has proposed the "Carbon peaking and Carbon neutrality goals" goal of carbon emissions will reach carbon peak by 2030 and carbon neutral by 2060. As a market-based environmental regulation policy to promote greenhouse gas emission reduction, carbon emission trading policy is expected to reduce carbon emissions and improve carbon productivity, among which industrial structure plays a regulatory role in the impact of carbon emission trading policy on carbon productivity. Using the provincial data of China from 2006 to 2019, this paper evaluated the influence of carbon emission trading policy on carbon emission, taking the industrial structure as the regulating variable, studied the industrial structure in the influence of environmental regulation on carbon emission, and tested the regression results of DID model through parallel trend test, placebo test and PSM-DID model regression. After the above research process, the following conclusions are drawn: the carbon emission trading policy has a significant positive promotion effect on carbon emission reduction, and it is further concluded that the industrial structure has a significant negative regulatory effect on carbon productivity under the carbon emission trading policy.

The Specific Impact of Environmental Regulations on the Comparative Advantage of Resource-Based Industries

With the increasing emphasis on global environmental issues and the deepening of the concept of sustainable development, the application and impact of environmental regulation are becoming increasingly prominent. Especially for pollution-intensive products, the impact of environmental regulation on the import and export trade of different pollution-intensive products is subject to various factors. The impact of environmental regulation on different resource-based industries still needs a lot of research. Through the method of literature analysis, this paper integrates the literature on the impact of environmental regulation on resource-based industries and concludes that the overall impact of environmental regulation on resource-based industries is positive and significant. For the paper and pulp industry, both exogenous and endogenous environmental regulations have enhanced its comparative advantage. For the non-ferrous metal and non-metallic mineral industry, environmental regulation can promote its technological progress and gain comparative advantage.

Environmental regulations, technological innovation, and low carbon transformation: A case of the logistics industry in China

China is the world's largest emitter of carbon dioxide. The logistics industry is the second largest source of CO2 emissions, second only to the manufacturing industry. Therefore, developing effective environmental regulations to achieve low-carbon transformation in the logistics industry is an urgent task for government managers. Based on the 2005–2021 panel data of China's 30 provinces, this article adopts a data-driven nonparametric additive model to investigate the role of environmental regulations in CO2 emission reduction in the logistics industry. The results display that overall, environmental regulations contribute to carbon reduction in the logistics industry (an inverted N-shaped effect). After endogeneity test and various robustness tests such as replacing the variable value of core variable, this conclusion still has good reliability. Further heterogeneity analysis indicates that the carbon reduction effect of mandatory environmental regulations fluctuates frequently (a W-shaped impact). However, the carbon reduction impact of incentive environmental regulations has gradually shifted from insignificant in the early stages to prominent in the later stages (an inverted U-shaped pattern). Regional heterogeneity analysis shows that the impact of environmental regulations on carbon reduction in the eastern, central, and western regions also has significant nonlinear characteristics. Finally, this article verifies that technological innovation and energy consumption structure are effective intermediate mechanisms for environmental regulations to affect emission reduction. The research findings provide practical inspiration for the government to formulate relevant environmental policies and promote the green development of the logistics industry.

Impact of environmental regulation on government subsides of public-private partnership waste-to-energy incineration projects: evidence from 66 cities in China

Introduction: Environmental regulation, as a vital component of public regulation in China, plays a crucial role in coordinating regional eco-efficiency, while the traditional hypothesis, Porter hypothesis, and uncertainty hypothesis offer three different perspectives for understanding the relationship between industry performance and environmental regulations.Methods: Based on the assumption of industry heterogeneity, 81 public-private partnership (PPP) waste-to-energy (WTE) incineration projects are analyzed using panel data from 66 cities within China during the period from 2013 to 2017 with the aims to reveal the underlying mechanism behind environmental regulation and the government subsides of public-private partnership waste-to-energy incineration projects by using multiple regression modeling.Results: The results show that the impact of environmental regulation on government subsides of PPP WTE projects has demonstrated an “Inverted-U”-shaped relationship with an inflection point, of which an increase in environmental regulation is positively correlated with an increase in subsidies at first then a negative correlation developing later.Discussion: The findings are significant in setting flexible environmental regulations according to the needs of regional economic and social development. In addition, they also supply a theoretical reference for promoting the WTE incineration industry’s sustainable and healthy development.

The impact of environmental regulation on innovation and international competitiveness

The purpose of this paper is to analyze the impact of environmental regulation on innovation and international competitiveness. We test the weak, narrow, and strong versions of Porter's hypotheses by looking at the impact of environmental regulation on exports both directly and indirectly through innovation and by introducing the role of pollution intensity in moderating the impact of stringent regulation on innovation and international competitiveness. Green policies are measured with the OECD Environmental Stringency Policy Index, distinguishing between market, non-market instruments, and technology support policies. Differently from previous papers, we adopt the technology gap approach to trade, which is suitable for relating environmental regulation to trade competitiveness and we apply the simultaneous-equation system econometric model with a moderating factor represented by pollution intensity. The results support the weak and strong versions of Porter’s hypotheses and find that the positive impact of regulation on innovation and exports increases with a country’s pollution intensity, suggesting that green policies, if properly coordinated, can represent a win–win strategy, fostering, at the same time, sustainability and international competitiveness.

Effects of environmental regulation on adjustment of agricultural industrial structure--An empirical study based on panel data of 31 provinces in China.

Using the panel data of 31 provinces in China between 2000 and 2018, this study theoretically and empirically analyses the impact of environmental regulations on the adjustment of the agriculture industrial structure from the perspectives of rationalisation and optimisation. Overall, variability in the impact of environmental regulation on the adjustment of the agricultural industrial structure is identified: a negative influence on the rationalisation of agricultural industrial structure and a positive influence on the optimisation of agricultural industrial structure. The impact of environmental regulations on the adjustment of agricultural industrial structure also reflects "large country characteristics": environmental regulations are more significant at the medium and low industrial structure levels. Environmental regulation significantly impacts the rationalisation of agricultural industrial structure in central and western regions and its optimisation in eastern and central regions. Through the panel threshold model test, this paper further finds that the effect of environmental regulations on the adjustment of agricultural industrial structure is not invariant. However, there is a non-linear relationship with significant threshold characteristics. Based on the above results, some countermeasures are suggested.

How Does Green Finance Policy Affect the Capacity Utilization Rate of Polluting Enterprises?

Effectively addressing overcapacity is the main task of China’s deepening supply-side reform and represents an intrinsic requirement for achieving sustainable economic development. Green finance policy, as a kind of environmental regulation policy that influences the behavior of polluting enterprises, can not only effectively facilitate the green transformation of production methods but also have a significant effect on the capacity utilization rate of enterprises. We use the promulgation of the Guidance on Building a Green Financial System in 2016 as a quasinatural experiment and the differences-in-differences (DID) method to study the effect of green finance policies on the capacity utilization rates of polluting enterprises based on data from 2012 to 2020 on A-share listed companies on the Shanghai Stock Exchanges (SSE) and Shenzhen Stock Exchanges (SZSE). We obtained the following results: (1) The implementation of green finance policies markedly improved polluting enterprises’ capacity utilization rate, which was supported by a sequence of robustness tests; (2) The mechanism test revealed that green finance policies serve to rectify information asymmetry and constrain improper government interventions through credit resource allocation mechanisms, thereby inhibiting overinvestments in polluting enterprises and ultimately increasing the capacity utilization rate. Additionally, green finance policies can improve product quality and diversity by incentivizing polluting enterprises’ technological innovation, enabling products to better meet market demand, and ultimately improving the capacity utilization rate; (3) The results of the heterogeneity analysis indicate that, for state-owned and large-scale polluting enterprises, green finance policies play a stronger role in increasing the capacity utilization rate. We have enriched the research related to the policy effects of green finance and the impact of environmental regulation on the capacity utilization rate, thus providing a useful reference for China to utilize green finance policies to address overcapacity, promote the transition to a more environmentally sustainable economic society, and achieve sustainable development.

The Impact of Environmental Regulation on the Investment Climate

The Impact of Environmental Regulation on the Investment Climate