IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v15y2024i3d10.1007_s13132-023-01500-9.html
   My bibliography  Save this article

Examining the Impact of China’s New Environmental Protection Law on Enterprise Productivity and Sustainable Development

Author

Listed:
  • Kai Qu

    (Yulin University
    Policy Institute of XiXian New Area)

  • Yapeng Zhang

    (Yulin University)

  • Yinling Liu

    (Yulin University)

  • Tao Feng

    (Policy Institute of XiXian New Area)

Abstract

The paper delves into the interplay between environmental regulations, technological advancement, and enterprise productivity in China’s evolving economic landscape. Against the backdrop of escalating environmental pollution and its adverse economic consequences, this study highlights the urgent need to balance economic growth and ecological well-being. The paper critically evaluates the multifaceted challenges posed by environmental degradation, acknowledging its toll on GDP and societal welfare. In a comprehensive exploration, the study leverages A-share listed industrial enterprises’ data from 2012 to 2017 to investigate the ramifications of China’s new Environmental Protection Law. Utilizing the Difference-in-Differences methodology, the research uncovers a nuanced relationship between the law’s implementation and enterprise total factor productivity (TFP). Initial findings indicate a short-term inhibitory effect on TFP, which gradually attenuates over time, reflecting a nonlinear impact of environmental regulations on enterprise performance. The paper unravels three mechanisms through which the law influences TFP: constraining technology Research and Development (R&D) input, impacting enterprise fixed investment and government subsidies, and mediating through government subsidies to shape enterprise R&D input and TFP. By dissecting these mechanisms, the study advances our understanding of how environmental governance, enterprise behavior, and technological innovation influence productivity outcomes. Theoretical implications underscore the need for a sophisticated and context-sensitive approach to policy evaluation, enriching the discourse on the intricate relationships between environmental regulations, technological innovation, and economic outcomes. Moreover, the paper offers valuable managerial insights, emphasizing the importance of strategic management of R&D investment, fixed asset allocation, and reliance on government subsidies in the face of evolving regulatory frameworks.

Suggested Citation

  • Kai Qu & Yapeng Zhang & Yinling Liu & Tao Feng, 2024. "Examining the Impact of China’s New Environmental Protection Law on Enterprise Productivity and Sustainable Development," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 10722-10747, September.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:3:d:10.1007_s13132-023-01500-9
    DOI: 10.1007/s13132-023-01500-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13132-023-01500-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13132-023-01500-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jknowl:v:15:y:2024:i:3:d:10.1007_s13132-023-01500-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.