Impacts of Environmental Regulation on the Green Transformation and Upgrading of Manufacturing Enterprises

Abstract

Since environmental problems are becoming increasingly prominent, macro policies and social development have placed higher requirements on manufacturing enterprises to promote green transformation and upgrading (GTU) in China. Considering that different manufacturing enterprises choose different green technology innovation levels for GTU under environmental regulation, a game model between manufacturing enterprises and the government is constructed. The relationship between the green technology innovation level (GTIL) and the environmental regulation intensity is analyzed. Through numerical examples, the influences of environmental regulation and consumer preference on system decisions are further examined. Moreover, an econometric model is constructed to explore the influence that the environmental regulation exerts on the GTIL using panel data from the Chinese manufacturing industry. Our results show that the increase in environmental regulation intensity contributes to improving GTIL and promoting the GTU of manufacturing enterprises. Furthermore, as the environmental regulation is enhanced, the sales price decreases, benefiting consumers. Consumers’ preference for high-GTIL products is conducive to GTU under environmental regulation. Empirical analysis shows that there is a U-shaped relationship between environmental regulation and the GTIL. Only when the intensity reaches a threshold can the environmental regulation be beneficial to improve the GTIL and promote the GTU of Chinese manufacturing enterprises.

Environmental regulations, capacity utilization, and high-quality development of manufacturing: an analysis based on Chinese provincial panel data

“…The rapid economic development has also brought tremendous pressure to the environment. For the sustainable development of the manufacturing industry, reducing the pollution emissions of the manufacturing industry is very important, and the use of environmental regulation to control pollution has become an inevitable trend 12 , 13 . China's manufacturing industry is still at the middle and low end of the industrial value chain, and excess production capacity should be eliminated as much as possible to reduce the impact on the environment.…”

Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

“…The sample for our research is 468 enterprises listed in Shanghai and Shenzhen stock exchanges, including 155 environment-friendly manufacturing enterprises and 313 non-ecological enterprises. According to Al-Tuwaijri et al 2004, Shen et al, (2020), and Wang et al (2020), environment-friendly manufacturing enterprises refer to firms whose main business are ecological products production [7,12,45]. Based on the corporate annual report and the industry classification of the listed companies, which is developed by Tonghuashun Finance and Economic, one of the most influential financial analysis companies in China, we manually analyze every firm's main business to determine whether it is an environment-friendly manufacturing enterprise.…”

“…SMEMEs can realize higher environmental performance due to their efficient and flexible operation [8,9], which is valued by the green credit policy. Nevertheless, the long-term problems of information asymmetry and the liability of small size contribute to a mismatch of financial resources [10], and in combination with the high uncertainty and failure risks of the ecological market [11,12], SMEMEs' access to banks loans may still be constrained. Thus, in this paper, we explore several important questions: How do banks evaluate SMEMEs in the context of China's green credit policy?…”

The Academic Landscapes of Manufacturing Enterprise Performance and Environmental Sustainability: A Study of Commonalities and Differences

“…External pressures also play a role; government regulations are being established in developed and developing economies [ 4 ]. Additionally, international agendas such as the Sustainable Development Goals from the United Nations include specific entries and calls to action concerning clean production [ 5 ].…”