Influence of Environmental Regulation and Resource Utilization on Research and Development Towards Sustainability: A Perspective of China’s Coal Mining Industry

Abstract

The multi-directional variation of results among environmental regulation, resource utilization, and Research and Development (R&D) investments continue to gain more popularity but few studies have examined the nexus among these variables in an open economy. To analyze the individual and combined effects of environmental regulation and resource utilization on industrial R&D investments, a panel data of 30 provinces in China from 2008 to 2018 was used. We also examined the mechanism underlying the magnitude of pollution inducement on R&D investment. The results show that environmental regulation significantly and positively promotes R&D investment while resource utilization has an inverse effect. Environmental regulation does not interfere with efficiency and neither does the quest for efficiency in resource utilization weaken the impact of environmental regulation on R&D investment. Only a few provinces are within the rising stages of the inverted n-shaped curve indicating environmental regulation level is still low. Even though there are tighter laws, government needs to continue to put in more stringent environmental policies towards achieving sustainable development.

Directions for Sustainable Development of China’s Coal Industry in the Post-Epidemic Era

“…Among the 18 new jobs announced by the Ministry of Human Resources and Welfare in March 2021 are carbon managers. QE (quantitative easing) policy has some impact on mitigating the impact of COVID-19 on the energy sector [41,42]. At the same time, environmental regulation has a positive effect on investment in R and D. The government needs to continue to formulate environmental policy in order to achieve SD [43], including the government's function of macroregulation, encouraging industry to develop alternative energy sources and reducing the use of fossil fuels and coal energy [44].…”