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Environmental regulations and industrial competitiveness: evidence from China

Author

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  • Spyridon Stavropoulos
  • Ronald Wall
  • Yuanze Xu

Abstract

Economic activities are closely related to real-world environmental issues. Currently, more attention is paid to the association between environmental regulations and industrial competitiveness (IC) because of pressures on economic development and environmental protection. In this study, we identify and explain the association between environmental regulations and IC in China. As the largest developing country in the world, China has the unavoidable responsibility of protecting the environment and promoting global economic development. We analyse the mechanisms behind environmental regulations and industrial competiveness at the provincial level and conclude that the impact of environmental regulations upon IC is not a simple linear one, but a U-shaped relationship. It is argued that the crucial intervention to activate the U-shaped relationship, or Porter’s Hypothesis, is innovation, which can be triggered by stringent regulations and well-designed policies.

Suggested Citation

  • Spyridon Stavropoulos & Ronald Wall & Yuanze Xu, 2018. "Environmental regulations and industrial competitiveness: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 50(12), pages 1378-1394, March.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:12:p:1378-1394
    DOI: 10.1080/00036846.2017.1363858
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