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Analysis of the Influence of Heterogeneous Environmental Regulation on Green Technology Innovation

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Listed:
  • Jingjing Liu

    (School of Business Administration, Anhui University of Finance and Economics, Bengbu 233030, China
    Business School, Hohai University, Nanjing 210098, China)

  • Min Zhao

    (Business School, Hohai University, Nanjing 210098, China)

  • Chao Zhang

    (School of Management, Hefei University of Technology, Hefei 230009, China
    School of Finance, Anhui University of Finance and Economics, Bengbu 233030, China)

  • Fangrong Ren

    (School of Economics and Management, Nanjing Forestry University, Nanjing 210037, China)

Abstract

Since its reform and opening up, China’s economy has undergone rapid development and has experienced problems such as the overexploitation of resources and the destruction of the ecological environment. To achieve a balance between economic growth and environmental protection and to follow the sustainable development path, China must implement corresponding environmental regulation policies and vigorously encourage enterprises to pursue green technology innovation. In this paper, environmental regulation is divided into command-and-control, market incentive and voluntary participation. Command-and-control environmental regulation is measured using the entropy method and the logarithm of the pollution discharge fee income in each region is used as the measurement index of market-incentive environmental regulations. At the same time, the logarithm of the number of environmental protection proposals planned by the National People’s Congress and the number of environmental protection proposals planned by the CPPCC is used as the measurement index of voluntary participation in environmental regulations. Based on a regression equation of the effects of environmental regulations on green technology innovation, this paper uses the two-step system GMM method to analyze the panel data of industrial enterprises larger than a designated size in 30 provinces, autonomous regions and municipalities in China from 2006 to 2017. Moreover, the paper compares the effects of command-and-control, market-incentive and voluntary participatory environmental regulations on green technology innovation. The empirical results show that command-and-control environmental regulations initially have an inverted U-shaped effect on green technology innovation and market incentive and voluntary participatory environmental regulations have a U-shaped effect on green technology innovation. A comparison of the three environmental regulation policies shows that the effect of command-and-control environmental regulation is more significant.

Suggested Citation

  • Jingjing Liu & Min Zhao & Chao Zhang & Fangrong Ren, 2023. "Analysis of the Influence of Heterogeneous Environmental Regulation on Green Technology Innovation," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3649-:d:1070655
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    References listed on IDEAS

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    1. Paul Lanoie & Michel Patry & Richard Lajeunesse, 2008. "Environmental regulation and productivity: testing the porter hypothesis," Journal of Productivity Analysis, Springer, vol. 30(2), pages 121-128, October.
    2. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    3. Gray, Wayne B. & Shadbegian, Ronald J., 2003. "Plant vintage, technology, and environmental regulation," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 384-402, November.
    4. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    5. Barbera, Anthony J. & McConnell, Virginia D., 1990. "The impact of environmental regulations on industry productivity: Direct and indirect effects," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 50-65, January.
    6. Sandra Rousseau & Stef Proost, 2005. "Comparing Environmental Policy Instruments in the Presence of Imperfect Compliance – A Case Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(3), pages 337-365, November.
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    Cited by:

    1. Deqin Lin & Yuetong Zhao, 2023. "The Impact of Environmental Regulations on Enterprises’ Green Innovation: The Mediating Effect of Managers’ Environmental Awareness," Sustainability, MDPI, vol. 15(14), pages 1-26, July.
    2. Haijun Wang & Jinlan Yang & Naiping Zhu, 2024. "Does Tax Incentives Matter to Enterprises’ Green Technology Innovation? The Mediating Role on R&D Investment," Sustainability, MDPI, vol. 16(14), pages 1-20, July.

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