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Assessing the impact of environmental regulation on enterprise high-quality development in China: A two-tier stochastic frontier model

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  • Lei, Pengfei
  • Cai, Qihai
  • Jiang, Fangxin

Abstract

With the heightened concern of environmental sustainability, the relationship between environmental regulations and enterprise high-quality development(HQD) has become increasingly intertwined. However, the specific impact of environmental regulation on enterprise HQD remains unclear. Based on the panel data of A-share listed manufacturing companies in China from 2010 to 2020, this study constructs a two-tier stochastic frontier model to measure the bilateral effects of environmental regulation on enterprise HQD. The empirical results indicate the following: 1. The positive effect of environmental regulation makes the HQD of enterprises 54.995% higher than the frontier level, while its negative effect results in HQD being 16.215% lower than the frontier level. 2. The net effect of environmental regulation on enterprise HQD is positive over time, and it overall displays a W-shaped fluctuating downward trend. 3. Heterogeneity analysis, categorized by various criteria, shows that enterprises that are in non-heavily polluting industries, audited by listed accounting firms, state-owned enterprises, with higher investor attention, and in regions with lower intensity of environmental regulation, experience a greater net positive effect from environmental regulation. Policy implications are discussed to enhance the effectiveness of environmental regulation and high-quality development of enterprise

Suggested Citation

  • Lei, Pengfei & Cai, Qihai & Jiang, Fangxin, 2024. "Assessing the impact of environmental regulation on enterprise high-quality development in China: A two-tier stochastic frontier model," Energy Economics, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:eneeco:v:133:y:2024:i:c:s014098832400210x
    DOI: 10.1016/j.eneco.2024.107502
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