Economics at your fingertips  

Quantity or quality? The impacts of environmental regulation on firms’ innovation–Quasi-natural experiment based on China's carbon emissions trading pilot

Jiangfeng Hu, Xinxin Pan and Qinghua Huang

Technological Forecasting and Social Change, 2020, vol. 158, issue C

Abstract: Recently, research on environmental regulation and firms’ innovation has emerged in large numbers. However, the research on the impact of China's carbon emission trading system (CETS) pilot policy on innovation quality is really lack. In order to fill this gap, this paper uses the panel data of China's A-share listed firms in 2008-2016, and adopts difference in difference in difference (DDD) model constructs a quasi-natural experiment on the impacts of CETS on quantity and quality of innovation. The results show that the CETS has a significantly positive effect on the quantity and quality of innovation, but the impact of the CETS on the innovation quantity, low-quality innovation and high-quality innovation are decreasing in turn. The CETS only promotes the innovation quantity and high-quality innovation of state-owned shares firms, large-size firms and eastern-section firms. In addition, according to mechanism test, after the implementation of the CETS pilot, if the government simultaneously reduces subsidies to “treatment group” firms, it can not only enlarge the direct promotion effect of CETS on the quantity and quality of innovation, but also eliminate the offsetting effect of government subsidies on “compliance costs”, thereby Indirectly promote the improvement of the quantity and quality of innovation.

Keywords: Carbon emissions trading system; Innovation quantity; Innovation quality; Difference in difference in difference model; Government subsidies (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.techfore.2020.120122

Access Statistics for this article

Technological Forecasting and Social Change is currently edited by Fred Phillips

More articles in Technological Forecasting and Social Change from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-10-17
Handle: RePEc:eee:tefoso:v:158:y:2020:i:c:s0040162520309483