Environmental regulation, economic policy uncertainty, and green technology innovation

Abstract

Green technology innovation is imperative to sustainable and environmentally sound economic development and is currently facing increasingly serious environmental threats. However, existing research has overlooked the uncertainties in economic policies. Based on the logical relationship between environmental regulation, economic policy uncertainty, and green technology innovation, this study empirically analyzed the quantitative relationship among these three variables using the xed-effect panel method and provincial panel data from 2000 to 2017 for 30 administrative regions of China. The results show that environmental regulation is positively correlated with green innovation, whereas economic policy uncertainty has a negative in uence on green innovation, thereby regulating the relationship between the remaining two factors. Moreover, considerable regional heterogeneity exists in these causal in uences, i.e., environmental regulation promotes green innovation in the eastern and middle regions but not signi cantly in the west. The uncertainty actively moderates the impact of environmental regulation on green innovation in all regions with an adjustment coe cient of approximately 0.8; however, it inhibits green innovation in different degrees, especially in the eastern and middle regions. Based on empirical results, we conclude that strict and appropriate environmental regulations are necessary and effective in China to encourage green technology innovation, especially in regions with uncertain economic policies.

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

“…However, in contrast to previous studies, with the adequate combination of paths, economically average and less developed northeastern, central, and western regions of China also satisfy the preconditions for the Porter hypothesis to hold. This is inconsistent with the finding that the green innovation effect of environmental regulations is significant in the eastern and central regions but not in the western region [94]. Wang and Liu [95] even found evidence indicating that environmental regulation reduces pollution in the east and central regions while increasing it in the west, which contradicts the findings of the present study.…”

CEO educational attainment, green innovation, and enterprise performance: Evidence from China’s heavy-polluting enterprises

“…When enterprises face the pressure of environmental regulation, they will weigh the cost of environmental penalties against the benefits of green innovation (He et al, 2022). Environmental regulation determinants can include a series of environmental punishments (Karydas and Zhang, 2019), a low-carbon city policy (Zhang W. et al, 2020), green tax (Li et al, 2021), emission rights, and carbon emission zone trading market policy (Huang et al, 2022). Innovation in cost-effective emission reduction has significant potential for enterprises' development.…”

Does Trade Policy Uncertainty Exacerbate Environmental Pollution?—Evidence from Chinese Cities

“…Referring to the practice of Fan et al, Fan et al, Li et al and Wang [ 41 , 42 , 43 , 44 ], this part divides the total sample into three regional sub-samples, namely, the eastern sample, the central sample and the western sample (Eastern provinces: Hebei, Liaoning, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Hainan; provinces of central cities: Jilin, Anhui, Shanxi, Jiangxi, Henan, Hubei, Hunan, Heilongjiang; provinces (autonomous regions) of western Cities: Yunnan Province, Inner Mongolia Autonomous Region, Sichuan Province, Ningxia Hui Autonomous Region, Guangxi Zhuang Autonomous Region, Xinjiang Uygur Autonomous Region, Gansu Province, Guizhou Province, Shaanxi Province and Qinghai Province.). Because the foreign trade system of Hong Kong, Taiwan and Macao are different, they are not taken as research objects in this study.…”