Voluntary environmental regulation and firm innovation in China

Bu, Maoliang; Qiao, Zhenzi; Liu, Beibei

doi:10.1016/j.econmod.2019.12.020

Cited by 179 publications

(71 citation statements)

References 56 publications

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“…In contrast, in Model (3) the coefficient of environmental regulation is 0.195 and significant at the 1% level, suggesting that environmental regulation can significantly promote the improvement of product productivity in China's manufacturing industry. This result is comparatively consistent with the theoretical analysis in Section 2; the innovation offset effect of environmental regulation encourages manufacturing enterprises to increase R&D input [19,21], thus improving both the ability to produce quality products and the product productivity [39,48].…”

Section: Mediation Testsupporting

confidence: 88%

“…This is basically consistent with the research of Li and Chen [51] and Liu and Xie [2], who believe that the innovation offset effect of strict environmental regulation policies is conducive to improving the export competitive advantage of "Made in China". It also demonstrates that China's environmental regulation policies significantly support the strong Porter hypothesis [39,52,53].…”

Section: Discussionmentioning

confidence: 80%

“…In fact, the improvement of product quality cannot be divorced from the R&D investment and innovation activity. Many studies have found that the innovation offset effect of environmental regulation can stimulate firms to increase R&D investment and strengthen independent innovation capability [16,19], thus facilitating the improvement of product productivity [21,39].…”

Section: The Mechanism Of Environmental Regulation Affecting Productmentioning

confidence: 99%

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Does Environmental Regulation Affect Export Quality? Theory and Evidence from China

Xie

Sun

Wang

et al. 2020

IJERPH

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Most studies focus on the empirical investigation of the relationship between environment and trade, but they lack a systematic theoretical framework. To fill this gap, this study constructs an analytical framework of export competitiveness from the perspective of product quality, and reveals the theoretical mechanism of environmental regulation affecting export quality. We empirically examine the impact of environmental regulation on the export quality of China’s manufacturing industry, as well as its possible mechanism. Our findings show that environmental regulation can significantly promote the export quality upgrading of the manufacturing industry and that process and product productivity are two possible channels through which such regulation affects export quality, although their mediating effects are in opposite directions. The mediating effect of product productivity is greater than that of process productivity, indicating that environmental regulation mainly has an innovation offset effect on China’s manufacturing industry. For pollution-intensive industries, environmental regulation plays a significant promoting role through the channel of product productivity, but, for clean industries, environmental regulation has an inhibitory effect through the channel of process productivity. These findings provide important enlightenment for the coordinated development of China’s ecological civilization and trade power.

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Section: Mediation Testsupporting

confidence: 88%

Section: Discussionmentioning

confidence: 80%

Section: The Mechanism Of Environmental Regulation Affecting Productmentioning

confidence: 99%

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Does Environmental Regulation Affect Export Quality? Theory and Evidence from China

Xie

Sun

Wang

et al. 2020

IJERPH

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“…With the introduction of increasingly stringent policies to address China's environmental issues, scholars have begun to ponder the effect of environmental regulation on technological innovation and trade competitiveness. Li and Zhu [20], Bu et al [21], and Shen et al [22] found in their empirical studies that China's environmental regulation policies validate the Porter hypothesis. Li et al [23] employed panel data of China's industrial sector from 1998 to 2008 to conduct an empirical analysis based on three comparative advantage indices.…”

Section: Environmental Regulation and Export Performancementioning

confidence: 91%

“…An increase in the size of an enterprise (Size) can lead to economies of scale and economies of scope, favoring innovation and competitiveness [21]. In this study, the size of the enterprise is measured by the ratio of gross industrial output to the number of enterprises in the respective industry.…”

Section: Other Control Variablesmentioning

confidence: 99%

Environmental Regulation, Technological Innovation, and Export Competitiveness: An Empirical Study Based on China’s Manufacturing Industry

Liu

Xie

2020

IJERPH

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A current and universal challenge, particularly in developing nations, is the establishment of effective environmental regulation policies that protect the ecological environment without adversely affecting the international competitiveness of the domestic manufacturing industry. To deal with this dilemma, this study investigates the export competitiveness of China’s manufacturing industry from the viewpoint of export value added. The Porter hypothesis is applied for an empirical investigation of the effect of environmental regulation on export competitiveness and to determine the presence of intra-industry heterogeneity. Furthermore, this study seeks to understand the mechanisms through which environmental regulation affects export competitiveness by exploring the two main approaches to technological innovation. The findings reveal that environmental regulation has a promotion effect of approximately 2% on the export competitiveness of China’s manufacturing industry; however, this effect is non-linear and displays a “U-shaped” tendency, indicating that certain prerequisites must be fulfilled to validate the Porter hypothesis. In addition, the effect of environmental regulation displays significant intra-industry heterogeneity, which is evident primarily in heavily polluting sub-industries and to a lesser extent in moderately polluting sub-industries but insignificant in lightly polluting sub-industries. Environmental regulation also differs significantly in the mechanisms through which it affects different approaches to technological innovation. Independent research and development is affected by environmental regulation through the compliance cost effect, which limits export competitiveness, while technology introduction is affected by the innovation offset effect, which favors export competitiveness. These findings offer political implications for the sustainable development of the ecological environment and foreign trade.

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Environmental labeling certification and firm environmental and financial performance: A resource management perspective

Ren

Zeng

2021

Bus Strat Env

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Environmental labeling certification (ELC) is a new type of voluntary environmental regulation for firm environmental governance. This study examines the impacts of ELC on firm environmental performance (EP) and financial performance (FP) from the resource management perspective. Based on a sample of 1325 Chinese A-share listed manufacturing firms from 2008 to 2016 with 9972 firm-year observations, it is found that ELC improves firm EP, but has a limited impact on firm FP. Specifically, ELC is found to have a significant impact on firm annual operating income (AOI) and Tobin's q, but has no impact on return on assets (ROA). Therefore, ELC has not yet promoted firms to achieve a win-win situation between EP and FP. Further analysis reveals that ELC can trigger environmental innovation offsets, but the effect of environmental innovation offsets is weak at present. Moreover, the impact of ELC on firm FP reflects the heterogeneity of the ownership structure. This study not only contributes to the existing literature, but also makes extensive practical contributions.

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Voluntary environmental regulation and firm innovation in China

Cited by 179 publications

References 56 publications

Does Environmental Regulation Affect Export Quality? Theory and Evidence from China

Does Environmental Regulation Affect Export Quality? Theory and Evidence from China

Environmental Regulation, Technological Innovation, and Export Competitiveness: An Empirical Study Based on China’s Manufacturing Industry

Environmental labeling certification and firm environmental and financial performance: A resource management perspective

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