The Effect of Environmental Policy Uncertainty on Enterprises’ Pollution Emissions: Evidence from Chinese Industrial Enterprise

Dong Le, Fei Ren, Yiding Tang and Yuke Zhu ()
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Dong Le: Economics School, Zhongnan University of Economics and Law, Nanhu Avenue 182, Wuhan 430073, China
Fei Ren: Economics School, Zhongnan University of Economics and Law, Nanhu Avenue 182, Wuhan 430073, China
Yiding Tang: School of Economics and Trade, Hunan University, Fenglin Road, Changsha 410006, China
Yuke Zhu: Economics School, Zhongnan University of Economics and Law, Nanhu Avenue 182, Wuhan 430073, China

IJERPH, 2022, vol. 19, issue 16, 1-22

Abstract: In response to the global call for emission reduction, China has assumed international responsibility for energy conservation and emission reduction by enacting several environmental policies to save energy and reduce consumption. However, it is debatable whether the increased uncertainty in environmental policies negatively affects firms’ emission reduction. Few studies have examined this relationship based on micro-level data. Therefore, this study constructs a theoretical framework of environmental policy uncertainty affecting firms’ pollution emissions. Based on comprehensive data from the Chinese Industrial Enterprise Database, the Chinese Industrial Enterprise Pollution Emission Database, and the Chinese Patent Database from 2002 to 2014, we empirically analyzed the impact of environmental policy uncertainty on firms’ pollution emissions. The results show that (1) environmental policy uncertainty significantly aggravates the pollution emission intensity of industrial enterprises; (2) environmental policy uncertainty inhibits the improvement of enterprises’ innovation capacity, reduces their human capital stock and foreign investment, and aggravates their pollution emission; (3) environmental policy uncertainty has significant heterogeneity on enterprise pollution emissions, that is, environmental policy uncertainty has a greater impact on non-export enterprises, large enterprises, young enterprises, capital-intensive enterprises, state-owned enterprises, and enterprises in polluting industries and central regions. This study provides a useful reference for the improvement of environmental policy and the green transformation of enterprises.

Keywords: environmental policy uncertainty; enterprise pollution emission; enterprise innovation; human capital; the foreign investment (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
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