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Does environmental regulation promote technology transfer? Evidence from a partially linear functional-coefficient panel model

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  • Cai, Hechang
  • Wang, Zilong
  • Zhang, Zhiwen
  • Xu, Liuyang

Abstract

This study employed panel data from 231 prefecture-level cities from 2005 to 2016 to investigate the relationship between environmental regulation and technology transfer in China. Previous studies suggested that environmental regulation promotes technological innovation; however, few studies focus on environmental regulation and technology transfer. After solving the endogeneity issue, the results indicated that a 1% increase in environmental regulation increased technology transfer strength by 0.322 units. Moreover, we confirmed that environmental regulation stimulates different technology transfer directions, such as outstrength, instrength, degree, outdegree, and indegree. Relevant interaction terms indicate that the effect is more substantial for city groups with lower gross domestic product (GDP) levels. We further utilized the partially linear functional-coefficient model to show that the marginal effects are only significant when the GDP of a city is within a specific range. These cities are divided into six groups to provide more detailed descriptions of environmental regulation's promoting effects.

Suggested Citation

  • Cai, Hechang & Wang, Zilong & Zhang, Zhiwen & Xu, Liuyang, 2023. "Does environmental regulation promote technology transfer? Evidence from a partially linear functional-coefficient panel model," Economic Modelling, Elsevier, vol. 124(C).
    • Handle: RePEc:eee:ecmode:v:124:y:2023:i:c:s0264999323001098
    DOI: 10.1016/j.econmod.2023.106297
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