Do federal regulations beget innovation? Legislative policy and the role of executive orders

Smirnova, Olga; Strumsky, Deborah; Qualls, Ashley C.

doi:10.1016/j.enpol.2021.112570

Cited by 10 publications

(3 citation statements)

References 35 publications

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“…This view argues that the inflexibility of environmental regulation policies inhibits firm innovation [36]. High spending on pollution abatement because of compliance with environmental regulations reduces firms' innovative activities [37], and the disincentive is especially pronounced in small and medium-sized firms, causing them to choose output reduction rather than increasing technological innovation to achieve abatement goals [38]. However, proponents of the Porter hypothesis argue that the restrictions environmental regulation imposes on pollution emissions have pushed firms towards green transformation, thus increasing the number of green patents and promoting technological progress rather than inhibiting it [39].…”

Section: Literature Reviewmentioning

confidence: 99%

Booster or Stumbling Block? The Role of Environmental Regulation in the Coupling Path of Regional Innovation under the Porter Hypothesis

Nie

et al. 2022

Sustainability

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In the 2018 Global Environmental Performance Index, China’s global air quality rank was fourth from last, indicating a more pronounced conflict between the environment and development compared with other countries. Because of the vastness of China’s land area, the development of different regions is imbalanced. The achievement of the stipulated goal to be among the top innovative countries in the world by 2035 not only depends on the economically developed eastern part of China but also on the relatively economically underdeveloped central, western, and northeastern parts. In this context, this paper uses time-varying qualitative comparative analysis to explore how the coupling paths of environmental regulation affect regional innovation. The results show that: (1) In most cases at the overall level of China, the Porter hypothesis is supported, and environmental regulation can play the role of a “booster” and stimulate regional innovation. In a few cases, however, the Porter hypothesis is not supported. (2) The Porter hypothesis is also supported in most cases at the regional level, where environmental regulation is mostly a “booster” for regional innovation in the east, center, west, and northeast. (3) Comparison of regional heterogeneity shows that environmental regulation is more important for stimulating regional innovation in the east than in the center, west, and northeast. This study helps to identify the role of environmental regulation in regional innovation. Moreover, it also helps to understand the emphasis China placed on environmental management during the early stages of its economic development.

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Section: Literature Reviewmentioning

confidence: 99%

Booster or Stumbling Block? The Role of Environmental Regulation in the Coupling Path of Regional Innovation under the Porter Hypothesis

Nie

et al. 2022

Sustainability

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“…For example, Lanoie et al (2011) argue that environmental regulation leads to higher production costs and damages the competitiveness of firms, which is detrimental to green innovation [29]. Smirnova et al (2021) also show that environmental regulation leads to a decrease in the output of MSMEs rather than promoting their green innovation level [30]. However, other scholars argue that environmental regulation is a necessary condition for firms to engage in green innovation, and that despite the fact that environmental regulation causes increased costs for firms, firms can obtain compensation through successful green innovation, and thus environmental regulation can trigger green innovation in firms [31,32].…”

Section: Research Hypothesis 221 the Relationship Between Emsc And Co...mentioning

confidence: 99%

Study on the Influence Mechanism of Environmental Management System Certification on Enterprise Green Innovation

Lei

Guo

et al. 2022

IJERPH

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Improving the green technology innovation capability of enterprises is an important way for industrial enterprises to improve product quality and production efficiency and reduce industrial pollution and energy consumption. Based on the Porter hypothesis, this paper took the data of listed companies of the heavy polluting industry in Chinese A-shares from 2011–2018 as a study sample, and a difference-in-differences (DID) model was constructed to explore the impact of environmental management system certification (EMSC) on enterprises’ green innovation. This paper also studied the differential impact between the EMSC and enterprises’ green innovation from the perspective of enterprise heterogeneity. It was found that the EMSC has a significant promotion effect on the enterprises’ green innovation; this promotion changes with the size and ownership of the enterprise and the lifecycle of the enterprise. Meanwhile, customer, shareholder, and creditor satisfaction all play a positive moderating role in the process of EMSC affecting green innovation, while the moderating role of supplier satisfaction is not significant. The findings of this paper have important implications for the understanding of the role of EMSC in promoting green innovation in enterprises.

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“…By acting as a “visible hand” to enhance the equilibrium effect of the market mechanism, governments can effectively offset the negative externalities caused by market failures and guide the development of green innovation. Research has shown that factors including government subsidies [ 3 ] and legislative constraints [ 4 ]. However, no research has touched upon the influence of government size on green innovation.…”

Section: Introductionmentioning

confidence: 99%

How Government Size Expansion Can Affect Green Innovation—An Empirical Analysis of Data on Cross-Country Green Patent Filings

Wen

Zhang

et al. 2022

IJERPH

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The expansion of government size will have dual effects on a country’s green innovation. An appropriately sized government size increases marginal productivity and stimulates the development of green innovation by increasing government expenditure. On the contrary, an excessively sized government creates a huge administrative agency, which not only increases the tax burden but also damages social welfare by excessive intervention. Therefore, the effect of government size on green innovation is not linear. In order to prove this proposition, this study examines the impact of government size on green innovation in 166 countries between 1995 and 2018, using a two-way fixed effects model. The results reveal an inverted U-shaped relationship between government size and the level of green innovation, indicating that optimal government size may maximize a country’s green innovation output. The results further suggest that this inverted U-shaped relationship is mainly influenced by environmental regulations and financial support. Finally, our heterogeneity analysis demonstrates that the inverted U-shaped relationship is more pronounced for countries with high organizational inertia and more R&D expenditure than for those with low organizational inertia and less R&D expenditure. This finding makes up for the research gap between government size and green innovation and provides a reference for countries to formulate the optimal government size to improve the level of green innovation.

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Do federal regulations beget innovation? Legislative policy and the role of executive orders

Cited by 10 publications

References 35 publications

Booster or Stumbling Block? The Role of Environmental Regulation in the Coupling Path of Regional Innovation under the Porter Hypothesis

Booster or Stumbling Block? The Role of Environmental Regulation in the Coupling Path of Regional Innovation under the Porter Hypothesis

Study on the Influence Mechanism of Environmental Management System Certification on Enterprise Green Innovation

How Government Size Expansion Can Affect Green Innovation—An Empirical Analysis of Data on Cross-Country Green Patent Filings

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