Environmental governance, technological innovation and employment structure change: evidence from China

Luxin Yang () and Yucheng Liu ()
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Luxin Yang: Nanjing University of Information Science and Technology
Yucheng Liu: Nanjing University of Finance and Economics

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 5, No 86, 12067-12090

Abstract: Abstract With the increasing intensity of domestic environmental regulation policies, while effectively curbing the pollution problem, it also has a great impact on the production and operation of enterprises, management methods, entry or exit from the market and other aspects, which will inevitably be accompanied by the transfer and flow of labor. Therefore, how to effectively solve environmental problems while ensuring employment stability and promoting the optimal allocation of labor force is an urgent problem to be solved. This paper takes the “Environmental Protection Regulatory Talk” implemented since 2014 as the policy impact, and uses instrumental variable method to analyze environmental governance, technological innovation and employment structure under the same framework. The study found that: (1) Environmental governance can optimize the employment structure of enterprises, and the intermediary channel of technological innovation plays a significant role. (2) From the heterogeneity analysis results, the employment structure optimization effect of environmental governance in the eastern region and the First-tier cities is stronger, which also widens the innovation gap and employment gap between regions. In addition, in heavy pollution enterprises, non-state-owned enterprises and large-scale enterprises, the effect of environmental governance on employment structure optimization is more significant. The above research conclusions have important implications for achieving a win–win situation between environmental protection and employment structure optimization. The results demonstrate that policy makers should promote the deep integration of environmental policies and employment policies, improve the incentive mechanism of environmental governance for technological innovation of enterprises, give play to the demonstration and driving role of developed regions, and implement differentiated support policies for heterogeneous enterprises. Graphical abstract

Keywords: Environmental governance; Technological innovation; Employment structure; Multi-period difference in difference (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-023-04414-3

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