A differentiated study of the impact of command and market-based environmental regulation on corporate R&D investments —take China's coal power industry chain as an example

Jiaming Gao and Li Zhang

Energy Policy, 2025, vol. 207, issue C

Abstract: Environmental regulation is an important means for governments to curb environmental pollution and enhance environmental governance, whereas corporate R&D investment determines long-term firm development and fosters technological innovation. To study the differences in the impact of command and market-based environmental regulation policies on corporate R&D investment, this paper uses data from China's coal firms, electric power firms, and environmental protection firms from 2011 to 2022 as a sample and conducts a differentiation analysis using bioinformatics domain methods. It is concluded that: (1) The Environmental Protection Tax Law (EPTL) and the New Environmental Protection Law (NEPL) complement each other in promoting R&D investment by coal and electric power firms. (2) The implementation of the EPTL not only consolidates the position of the NEPL but also encourages firms to invest in R&D. This is achieved through regulating pollution discharge fee standards, reducing local government intervention, intensifying the enforcement power of the NEPL, and increasing government subsidies for environmental protection initiatives. (3) Compared with the NEPL, the EPTL has a greater impact on the R&D investments of coal and electric power firms and demonstrates better timeliness.

Keywords: Coal power industry chain; Environmental regulation policy; Corporate R&D investment; Differentiation analysis (search for similar items in EconPapers)
JEL-codes: L52 L78 L88 Q43 Q55 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:207:y:2025:i:c:s030142152500343x

DOI: 10.1016/j.enpol.2025.114836

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