Does the porter hypothesis work well in the emission trading schema pilot? Exploring moderating effects of institutional settings

Chenfei Jin, Fu-Sheng Tsai, Qiuyang Gu and Bao Wu

Research in International Business and Finance, 2022, vol. 62, issue C

Abstract: Using a dataset of Chinese private firms from 2002 to 2014, this study examines the impact of China’s SO2 emission trading schema pilot on industrial innovation. In particular, this study explores the moderating effects of institutional settings from the perspective of new structural economics. Our finding shows positive support for the Porter Hypothesis (Porter and Linde, 1995), demonstrating that institutional regulation may enhance its impact on industrial innovation. Furthermore, both regulatory system and regulation enforcement may positively moderate the policy effect of emission trading schema on industrial innovation. Our findings indicate that market-oriented environmental regulation should be enforced in the aid of institutional settings.

Keywords: Environmental regulation; Industrial innovation; Institutional setting; Emission trading schema (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922001209

DOI: 10.1016/j.ribaf.2022.101732

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