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Environmental regulations, enterprise productivity, and green technological progress: large-scale data analysis in China

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  • Yuhuan Sun

    (School of Statistics of Dongbei University of Finance and Economics)

  • Juntao Du

    (School of Statistics of Dongbei University of Finance and Economics)

  • Shuhong Wang

    (Ocean University of China)

Abstract

Environmental regulations can increase enterprise production costs and reduce production efficiency. This study analyzes the annual reports of 132 enterprises in 16 highly polluting industries over 9 years, which includes 52,272 data points comprising 1188 observed values from the 132 enterprises. We find that environmental regulations tend to increase the environment-friendly and non-environment-friendly research and development (R&D) inputs of the enterprises. Irrespective of the type of R&D input, the quality of the enterprise staff improves and their enthusiasm and initiative for work increases, resulting in increased enterprise production efficiency. Additionally, an increase in human capital significantly facilitates the improvement of enterprise staff quality, whereas, an expansion in the size of an enterprise does not tend to improve its productivity owing to decreasing returns to scale. This study further conducts a robustness test that replaces the explanatory variables with total factor productivity and resolves Malmquist efficiency indexes. The result of this robustness test supports the preliminary regression results. The conclusion of this study can help enterprises be competitive in global markets, and the results can serve as advice for the leads of enterprises.

Suggested Citation

  • Yuhuan Sun & Juntao Du & Shuhong Wang, 2020. "Environmental regulations, enterprise productivity, and green technological progress: large-scale data analysis in China," Annals of Operations Research, Springer, vol. 290(1), pages 369-384, July.
    • Handle: RePEc:spr:annopr:v:290:y:2020:i:1:d:10.1007_s10479-019-03249-4
    DOI: 10.1007/s10479-019-03249-4
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    2. Jia Li & Decai Tang & Acheampong Paul Tenkorang & Zhuoran Shi, 2021. "Research on Environmental Regulation and Green Total Factor Productivity in Yangtze River Delta: From the Perspective of Financial Development," IJERPH, MDPI, vol. 18(23), pages 1-24, November.
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    6. Xinfei Li & Chang Xu & Baodong Cheng & Jingyang Duan & Yueming Li, 2021. "Does Environmental Regulation Improve the Green Total Factor Productivity of Chinese Cities? A Threshold Effect Analysis Based on the Economic Development Level," IJERPH, MDPI, vol. 18(9), pages 1-21, April.
    7. 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).
    8. Michael L. Polemis & Mike G. Tsionas, 2022. "Endogenous productivity: a new Bayesian perspective," Annals of Operations Research, Springer, vol. 318(1), pages 425-451, November.
    9. Qianxing Ding & Lianying Zhang & Shanshan Huang, 2024. "Research on Environmental Pollution Control Based on Tripartite Evolutionary Game in China’s New-Type Urbanization," Sustainability, MDPI, vol. 16(15), pages 1-19, July.
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