Regulation, innovation, and firm selection: The porter hypothesis under monopolistic competition

Qiu, Larry D.; Zhou, Mohan; Wei, Xu

doi:10.1016/j.jeem.2017.08.012

Cited by 113 publications

(46 citation statements)

References 21 publications

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“…Porter and Van der Linde, 1995), which focuses on induced technological adjustment at the level of individual firms, as an explanation for this positive link between environmental regulation and productivity at the aggregate level. Our finding is also related to Qiu et al (2018), who find a similar result in a closed economy with linear demand. Interestingly, in our model with 14 Precisely, ϕ i is the average productivity of labour that is used in the production process.…”

Section: Firm Selectionsupporting

confidence: 83%

Environmental Policy and Firm Selection in the Open Economy

Kreickemeier

Richter

2019

SSRN Journal

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In this paper, we analyse the effects of a unilateral change in an emissions tax in a model of international trade with heterogeneous firms. We find a positive effect of tighter environmental policy on average productivity in the reforming country through reallocation of labour towards exporting firms. Domestic aggregate emissions fall, due to both a scale and a technique effect, but we show that the reduction in emissions following the tax increase is smaller than in autarky. Moreover, general equilibrium effects through changes in the foreign wage rate lead to a reduction in foreign emissions and, hence, to negative emissions leakage in case of transboundary pollution.

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Section: Firm Selectionsupporting

confidence: 83%

Environmental Policy and Firm Selection in the Open Economy

Kreickemeier

Richter

2019

SSRN Journal

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“…The resource endowment has an important influence on firms' strategy selection (Oliver, ). For firms with difficulties complying with regulations, top managers are more focused on the threatening aspects of governmental inspection, and firms will passively respond to external inspections by employing end‐of‐pipe control technology and committing unethical activities, such as bribery and deceptive behaviors, rather than investing in green innovation (Qiu, Zhou, & Wei, ).…”

Section: Literature and Hypothesesmentioning

confidence: 99%

Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

Zou

Xie

2020

Corp Soc Responsibility Env

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As an important method for normalizing firms' environmental behaviors, regulatory inspection has received much attention in both practice and research. However, a consistent conclusion regarding whether and under what conditions regulatory inspection leads to green innovation is lacking. Drawing on the attention‐based view, we argue that the threats or opportunities that top managers perceive from environmental inspection affect the attention they pay to the strategy of green innovation as a response. We hypothesize that firms lacking the capability of regulatory compliance are less likely to invest in green innovation and that the development of promarket institutions diverts managers' attention from reacting to governmental inspection. Using survey data on Chinese industrial firms, we confirm these hypotheses, the theoretical and practical implications of which are discussed.

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“…Nguyen et al [37] researched manufacturing SMEs in Viet Nam and found that environmental regulations stimulate enterprise innovation and thus has a positive impact on enterprise performance. Qiu et al [38] found that appropriate environmental regulations can increase industry profits. Cordella and Devarajan [39] evaluated the United States' withdrawal from the Paris agreement on climate change and found that deregulating the environmental regulation may have a negative impact on industry profitability.…”

Section: Environmental Regulation and Enterprise Tfpmentioning

confidence: 99%

Can the Introduction of an Environmental Target Assessment Policy Improve the TFP of Textile Enterprises? A Quasi-Natural Experiment Based on the Huai River Basin in China

Ding

Yang

2020

Sustainability

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Green development is an inevitable requirement to build a modern economic system and fundamental solution to pollution problems. Exploring the relationship between environmental regulation and enterprise total factor productivity (TFP) has great significance for realizing the win-win goal of achieving both environmental protection and economic development. Based on a firm-level dataset from 2000-2007, this paper explores the economic effects of the Environmental Target Assessment Policy of Huai River Basin (ETAP, HRB) in 2004, an environmental regulation that clarifies the responsibility of local governments, by identifying changes in the TFP of the clothing industry (CMI). The empirical findings support that the ETAP can significantly promote improvement in the TFP using the difference in differences (DID) method. Robustness tests, such as the triple differences (DDD) and propensity score matching-difference in differences (PSM-DID), are used to address concerns about the DID approach. Analysis of dynamic effects shows that the ETAP has no impact on enterprise TFP in 2004 but significantly improve the TFP on the next three years (2005-2007). The heterogeneity test results indicate that nonstate-owned enterprises are more sensitive to the ETAP, and the coefficient of the average treatment effect is 0.033. In addition, the ETAP has no noteworthy impact on large- and medium-scale enterprises but results in an average increase of 0.037 in small-scale enterprises’ TFP.

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Regulation, innovation, and firm selection: The porter hypothesis under monopolistic competition

Cited by 113 publications

References 21 publications

Environmental Policy and Firm Selection in the Open Economy

Environmental Policy and Firm Selection in the Open Economy

Governmental inspection and green innovation: Examining the role of environmental capability and institutional development

Can the Introduction of an Environmental Target Assessment Policy Improve the TFP of Textile Enterprises? A Quasi-Natural Experiment Based on the Huai River Basin in China

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