The impact of environmental regulation on enterprise green innovation

Qin Kun, Yao Chang and Niu Runkai

Economic Analysis and Policy, 2024, vol. 84, issue C, 1933-1944

Abstract: This paper evaluates the real effects of the environmental regulation at the firm level. Using the implementation of Chinese Air Pollution Prevention and Control in 2013 as a quasi-natural experiment,difference-in-differences estimation shows that: (1) environmental regulation significantly improve the application of green innovation by firms, and this relationship is robust to different specifications and alternative measures; (2) three possible channels are the improved levels of the environmental protection subsidy, total factor productivity (TFP) and environmental protection investment of enterprises; (3) our findings are particularly pronounced in subsamples with the application of utility green innovation and state-owned enterprises (SOEs). Overall, this paper reveals the micro-mechanisms behind the real effects of environmental regulation on firm green innovation, thus providing timely implications for regulators concerned with environmental protection.

Keywords: Environmental regulation; Green innovation; Quasi-natural experiment; Air Pollution Prevention and Control (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:84:y:2024:i:c:p:1933-1944

DOI: 10.1016/j.eap.2024.11.008

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