Labor Costs, Market Environment and Green Technological Innovation: Evidence from High-Pollution Firms

Rui Gong, Yong-Qiu Wu, Feng-Wen Chen and Tai-Hua Yan
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Rui Gong: School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
Yong-Qiu Wu: School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
Feng-Wen Chen: School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
Tai-Hua Yan: School of Economics and Business Administration, Chongqing University, Chongqing 400030, China

IJERPH, 2020, vol. 17, issue 2, 1-20

Abstract: Emerging economies face the challenge of increasing labor costs but also provide an opportunity to promote environmental governance and green development. Based on the perspectives of impetus and capability, the effects of rising labor costs and market environment on green technological innovation are investigated in this study. The empirical studies used the data of high-pollution firms in China from 2009 to 2018. Results demonstrate that rising labor costs deteriorates high-pollution firm performance, while highly competitive industries are affected more than other industries. Meanwhile, the influence of rising labor costs on green technological innovation has a threshold effect which illustrates an “inversely U-shaped” variation trend with the increase of degree of market monopoly. The labor costs will make biggest impact on the green technological innovation in the moderately concentrated market environment. Basing from these results, this study provides the following suggestions for emerging economies’ green development: Take rising labor cost as an opportunity to advance technological progress to the green direction, establish a sound market competition environment, and develop green finance to reduce the financing constraints of green technological innovation.

Keywords: labor cost; green technological innovation; firm performance; market environment (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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