Market-based environmental regulation and total factor productivity: Evidence from Chinese enterprises

Peng, Jiaying; Xie, Rui; Ma, Chunbo; Fu, Yang

doi:10.1016/j.econmod.2020.03.006

Cited by 164 publications

(78 citation statements)

References 38 publications

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“…The results support the hypothesis that the increase in the environmental investment of enterprises in high-marketization areas is higher because a sudden high government intervention put legal pressure on the enterprises, which caused enterprise to increase their environmental investment to meet external requirements. Interestingly, rm ownership did not play the expected moderating role, which is not consistent with the results of Zhang et al (2019) and Peng et al (2020). This paper holds that the dual role of SOEs is the main reason for this difference.…”

Section: Theoretical Contributionscontrasting

confidence: 73%

Regional Environmental Supervision And Corporate Environmental Investment: From The Perspective of Ecological Damage Compensation

Zeng

Chen

Jin

et al. 2021

Preprint

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Based on the “Pilot Reform of the Compensation System for Ecological and Environmental Damage” launched in 2015 and a research sample of listed companies in China's heavy pollution industry from 2014 to 2017, this paper uses a difference-in-differences model to empirically test the impact of the compensation system on corporate environmental investment, as well as the moderating effect of market degree and firm ownership. The result shows that the implementation of the compensation system has significantly promoted corporate environmental investment, and the market degree has a moderating effect, but the supervision effect remains the same due to firm ownership. Local government’s strict environmental supervision on local enterprises is the important channel to ensure the function of ecological damage compensation system. This research provides a reference for the national government to formulate specific and effective environmental policies, stimulate the environmental governance motivation of local governments, and encourage enterprises to assume environmental responsibilities, to achieve green and sustainable development.

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Section: Theoretical Contributionscontrasting

confidence: 73%

Regional Environmental Supervision And Corporate Environmental Investment: From The Perspective of Ecological Damage Compensation

Zeng

Chen

Jin

et al. 2021

Preprint

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“…Since non-parametric methods such as data envelopment analysis may not avoid simultaneity and selection bias problems (Gatto et al 2011), parametric methods such as stochastic frontier analysis rely heavily on the assumption of TFP distribution (Xiao et al 2021). In light of these de ciencies, we employ two semiparametric methods proposed by Levinsohn and Petrin (2003) and Olley and Pakes (1996), called LP and OP methods, respectively, are the most widely used to measure enterprises' TFP (Ai et al 2020;Peng et al 2021). The LP method is an improvement of the OP method due to its unbiased consistent estimation results and its superiority in mitigating both the endogenous problems and sample loss (Cai and Ye 2020).…”

Section: Dependent Variablesmentioning

confidence: 99%

“…One possible reason is that state-owned enterprises undertake important political tasks for the state and are also politically sheltered by the government ). Therefore, state-owned enterprises are more likely to enjoy preferential policies from the government, such as government subsidies and credit preferences, and are less likely to be adversely affected by environmental regulation policies (Peng et al 2021). Accordingly, compared with non-state-owned enterprises, state-owned enterprises are more motivated to improve TFP.…”

Section: The Heterogeneity Of Corporate Ownership Structurementioning

confidence: 99%

Environmental Regulation, Enterprises' Bargaining Power, and Enterprises' Total Factor Productivity: Evidence from China

Yang

Wang

Hao

et al. 2021

Preprint

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The relationship between environmental regulation and enterprises' total factor productivity (TFP) has been a hot topic in the field of environmental economics, but the conclusions are still mixed. Employing a sample of 14,110 firm-year observations in China from 2010 to 2018, our research explores whether and when environmental regulation could trigger firms, to enhance TFP. The available evidence leads us to cautiously conclude that: 1) Environmental regulation notably improves enterprises' TFP, the conclusion still holds after a series of robustness tests. 2) Enterprises' bargaining power significantly weakens the influence of environmental regulation on enterprises' TFP. 3) Compared with non-state-owned enterprises and non-heavy-polluting industries, environmental regulation has a greater impact on state-owned enterprises and heavy-polluting industries; higher executive compensation does not motivate firms to improve TFP; compared with enterprises headquartered in non-provincial capital cities, environmental regulation has a greater impact on enterprises' TFP in provincial capital cities. Overall, the findings of our research are extremely relevant for the government, investor, and enterprise's manager, this paper provides micro-firm-level evidence for the Porter hypothesis in practice in China.

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“…The results showed that Chinese SO 2 ETP promoted enterprise innovation significantly, but without any effect on enterprise total factor productivity (TFP). While, Peng et al [5] found that market-based environmental regulation has a significant productivity enhancement effect for all types of industrial enterprises, and the effect is more obvious for private enterprises, and more productive and less polluting enterprises. In fact, the view of Peng et al [5] is also supported by other scholars.…”

Section: Introductionmentioning

confidence: 99%

“…Compared with the previous command and control environmental regulation, these systems are considered to provide enterprises with more flexible mechanisms to protect the environment. Meanwhile, it even increased the productivity through production processes adjustment, reallocation of resources and innovation [5]. For SO 2 emissions reductions, America is the first one to implement the world SO 2 emissions trading pilot (ETP) since 1990.…”

Section: Introductionmentioning

confidence: 99%

Productivity Effect Evaluation on Market-Type Environmental Regulation: A Case Study of SO2 Emission Trading Pilot in China

Feng

Chen

Failler

2020

IJERPH

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Taking China’s SO2 emissions trading pilot (ETP) in 2007, a large-scale market-based environmental regulation as its target, this paper reexamines the strong Porter hypothesis by adopting the method of propensity score matching-differences-in-differences. Research shows the following results: first, SO2 ETP which provides high flexibility for enterprises in the process of emission reduction, improves total factor productivity (TFP) significantly on the whole. Second, the productivity effect of market-based environmental regulation varies from the productivity level of enterprise. For example, the SO2 ETP has a significant effect on TFP only at 40–80 percent quantile of TFP, and the effect increases at first and then decreases. Third, the financing constraints and bargaining power of enterprises have significant negative moderating effects on the impact of SO2 ETP on TFP, and the moderating effects between state-owned and non-state-owned enterprises exist heterogeneity. In conclusion, it provides reference for the formulation of market-type environmental regulations and the realization of high-quality development for developing countries.

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Market-based environmental regulation and total factor productivity: Evidence from Chinese enterprises

Cited by 164 publications

References 38 publications

Regional Environmental Supervision And Corporate Environmental Investment: From The Perspective of Ecological Damage Compensation

Regional Environmental Supervision And Corporate Environmental Investment: From The Perspective of Ecological Damage Compensation

Environmental Regulation, Enterprises' Bargaining Power, and Enterprises' Total Factor Productivity: Evidence from China

Productivity Effect Evaluation on Market-Type Environmental Regulation: A Case Study of SO2 Emission Trading Pilot in China

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