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The impact of eco-innovation on environmental performance in different regional settings: new evidence from Chinese cities

Author

Listed:
  • Lichao Wu

    (Xiamen University)

  • Lili Wang

    (Maastricht University)

  • Niels J. Philipsen

    (Maastricht University
    Erasmus University Rotterdam)

  • Xinyi Fang

    (Xiamen University)

Abstract

Eco-innovation is crucial for pollutants emissions reduction and environmental improvement. However, little is known on how it functions in relation to different technology capabilities and regulations. Using economic and environmental information collected for 285 Chinese cities in the period of 2005–2017, this paper investigates how eco-innovation functions in different contexts. First, different from the existing literature that has mainly focused on direct eco-innovation, our study shows that indirect eco-innovation—spillovers from other regions—can have an even greater impact than direct eco-innovation. This demonstrates the importance of absorbing eco-innovation spillovers from other regions to reduce the amount of pollutants and strengthen environmental performance, in particular for regions without sufficient local R&D capabilities. Second, this study investigates how different kinds of environmental regulation can function differently in stimulating new eco-innovation, which stresses the importance of differentiated instruments in incentivizing firms to adopt eco-innovation and maximize their contributions to environmental performance. In addition, our study also emphasizes the role that cities’ financial development plays in influencing the connection among eco-innovation, different kinds of environmental regulation and environmental performance. An understanding of these mechanisms is critical for the government to improve eco-innovation activities accordingly and make policies that fit specific regional contexts.

Suggested Citation

  • Lichao Wu & Lili Wang & Niels J. Philipsen & Xinyi Fang, 2025. "The impact of eco-innovation on environmental performance in different regional settings: new evidence from Chinese cities," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(4), pages 9211-9232, April.
    • Handle: RePEc:spr:endesu:v:27:y:2025:i:4:d:10.1007_s10668-023-04280-z
    DOI: 10.1007/s10668-023-04280-z
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    More about this item

    Keywords

    Eco-innovation; Spillovers; Environmental regulation; Environmental performance;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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