The effect of mandatory environmental regulation on green development efficiency: evidence from China

Abstract

The existing literature finds that mandatory environmental regulation (MER) can significantly reduce environmental pollution. However, much less is known about how the implementation of MER affects green development efficiency (GDE). Based on the Air Pollution Control Action Plan which was enforced in 2013 in China’s most developed regions as an exogenous shock, we find that first, MER has a significant negative effect on the improvement of GDE by reducing regional scale efficiency. Second, MER mainly reduces the GDE of cities with stronger regulation intensities and with larger economic volumes. Third, MER also has a negative impact on regional green total factor productivity by changing technical progress. We suggest that when implementing MER, governments should enhance regional and global cooperation, promote green technology, and use comprehensive policy tools to stimulate firms’ green innovation.

The Relationship between Environmental Regulation, Green-Technology Innovation and Green Total-Factor Productivity—Evidence from 279 Cities in China

“…The “strong” version of the Porter hypothesis is not supported [ 16 ]. Zhan et al proposed that mandatory environmental regulation had a significant negative effect on the improvement of green-development efficiency by changing technical progress [ 17 ]. Lanoie et al provided an empirical analysis, and found that environmental regulation on productivity was negative, while the opposite result was observed with lagged regulatory-variables in Quebec [ 18 ].…”

Environmental, social and governance performance and green transformation strategies for enterprises: Improving technical efficiency or expanding technological boundaries

“…Therefore, we incorporated both expected and unexpected outputs into the green TFP indicator system. Using the slack-based measure (SBM) directional distance function [ 51 , 52 ] with a nondirectional and variable returns-to-scale model, we measured green TFP using the Malmquist–Luenberge (ML) productivity index ( Eq 1 ): …”

Environmental regulation promotes green development in China: from the perspective of technological innovation

“…There are few studies on the relationship between all of them. Although some literature find that technological innovation affects the green development effect of environmental regulation (Zhan et al, 2023), few studies find the role form of technological innovation. Scholars agree that the improvement of innovation level has a positive impact on green development (Ouyang et al, 2020;Ren et al, 2023a).…”

“…Some scholars used the differential method to evaluate the effect of specific policies. For example, they found that the implementation of the Air Pollution Control Action Plan would inhibit the efficiency of green development (Zhan et al, 2023). It can be found that the classification of environmental regulations by pollutants and periods is not common.…”