Abstract
One of the ways to fight against global warming is by means of green technological progress. This paper explores the nonlinear relationship between R&D investment and green technological progress based on panel threshold regression model using panel data of 26 manufacturing sub-sectors in China from 2004 to 2017. The results show that the double-threshold model can better explain the nonlinear relationship between the two, and the R&D investment in the three ranges of low, medium, and high levels can significantly promote green technological progress in China’s manufacturing industry. However, with the improvement of R&D investment level, the promotion effect of R&D investment on the progress of manufacturing green technology is decreasing, which explains the low R&D intensity of China’s manufacturing industry to a certain extent. When the level of R&D investment reaches a certain level, its promoting effect on manufacturing industry’s green technological progress will be greatly reduced, and the motivation of enterprises to invest in R&D based on self-interest will decrease, so that the scale of R&D investment will be lower than the optimal scale of society. R&D investment can also improve green technical efficiency change. In addition, environmental regulation can promote green technological progress in manufacturing industry. However, due to the implementation of output-oriented environmental regulation policies, China’s environmental regulation can inhibit the improvement of green technical efficiency change. Based on the conclusion, this paper argues that China should implement differentiated R&D subsidy policies for manufacturing enterprises, especially to increase R&D subsidies for enterprises with a medium level of R&D investment, and formulate appropriate environmental regulatory policies, to promote green and low-carbon transformation of China’s manufacturing sector.
Similar content being viewed by others
Data availability
All materials and data which are generated or analyzed during this study are included in this article.
References
Acemoglu D, Aghion P, Bursztyn L et al (2012) The environment and directed technical change. Am Econ Rev 102(1):131–166. https://doi.org/10.1257/aer.102.1.131
Aghion P, Howitt P (1992) A model of growth through creative destruction. Econometrica 60(2):323–351. https://doi.org/10.2307/2951599
Alam M, Atif M, Chien-Chi C et al (2019) Does corporate R&D investment affect firm environmental performance? Evidence from G-6 countries. Energ Econ 78:401–411. https://doi.org/10.1016/j.eneco.2018.11.031
Arrow K (1962) Economic welfare and the allocation of resources for innovation. In: Nelson R (ed): The rate and direction, of economic activity. Princeton University Press, New York, pp 609–625. https://doi.org/10.1515/9781400879762-024
Baumann J, Kritikos AS (2016) The link between R&D, innovation and productivity: are micro firms different? Res Policy 45(6):1263–1274. https://doi.org/10.1016/j.respol.2016.03.008
Bruno RL, Crescenzi R, Estrin S et al (2021) Multinationals, innovation, and institutional context: IPR protection and distance effects. J Int Bus Stud. https://doi.org/10.1057/s41267-021-00452-z
Buera FJ, Oberfield E (2020) The global diffusion of ideas. Econometrica 88(1):83–114. https://doi.org/10.3982/ecta14044
Cao H, Wang B, Li K (2021) Regulatory policy and misallocation: a new perspective based on the productivity effect of cleaner production standards in China’s energy firms. Energ Policy 152.https://doi.org/10.1016/j.enpol.2021.112231
Chen SS (2011) Reconstruction of sub-industrial statistical datain China (1980–2008). China Economic Quarterly 10(03):735–776. https://doi.org/10.13821/j.cnki.ceq.2011.03.012
Chen S, Golley J (2014) “Green” productivity growth in China’s industrial economy. Energ Econ 44:89–98. https://doi.org/10.1016/j.eneco.2014.04.002
Chen L, Li K, Chen S et al (2021) Industrial activity, energy structure, and environmental pollution in China. Energ Econ 104.https://doi.org/10.1016/j.eneco.2021.105633
Chishti MZ, Alam N, Murshed M et al (2022) Pathways towards environmental sustainability: exploring the influence of aggregate domestic consumption spending on carbon dioxide emissions in Pakistan. Environ Sci Pollut Res 29(29):45013–45030. https://doi.org/10.1007/s11356-022-18919-3
Coe D, Helpman E (1995) International R&D spillovers. Eur Econ Rev 39(5):859–887. https://doi.org/10.1016/0014-2921(94)00100-E
Dong X, Yang Y, Zhuang Q et al (2022) Does environmental regulation help mitigate factor misallocation? Theoretical simulations based on a dynamic general equilibrium model and the perspective of TFP. Int J Environ Res Public Health 19(6). https://doi.org/10.3390/ijerph19063642
Ejermo O, Kander A, Henning M (2011) The R&D-growth paradox arises in fast-growing sectors. Res Policy 40(5):664–672. https://doi.org/10.1016/j.respol.2011.03.004
Faff R, Ho Y, Yap C (2013) Diminishing marginal returns from R&D investment: evidence from manufacturing firms. Appl Econ 45(5):611–622. https://doi.org/10.1080/00036846.2011.608644
Fan JD, Teo T (2022) Will China’s R&D investment improve green innovation performance? An empirical study. Environ Sci Pollut Res 29:39331–39344. https://doi.org/10.1007/s11356-021-18464-5
Fei RL, Cui AX, Qin KY (2020) Can technology R&D continuously improve green development level in the open economy? Empirical evidence from China’s industrial sector. Environ Sci Pollut Res 27:34052–34066. https://doi.org/10.1007/s11356-020-09357-0
Fischer C, Newell RG (2008) Environmental and technology policies for climate mitigation. J Environ Econ Manag 55(2):142–162. https://doi.org/10.1016/j.jeem.2007.11.001
Griffith R, Redding S, van Reenen J (2004) Mapping the two faces of R&D: Productivity growth in a panel of OECD industries. Rev Econ Stat 86(4):883–895. https://doi.org/10.1162/0034653043125194
Griliches Z (1988) Productivity puzzles and R&D: another nonexplanation. J Econ Perspect 2(4):9–21. https://doi.org/10.1257/jep.2.4.9
Griliches Z (1992) The search for R&D spillovers. Scand J Econ 94:29–47. https://doi.org/10.2307/3440244
Griliches Z (1998) R&D and productivity: the econometric evidence. Econ J 109(456):463–532. https://doi.org/10.1111/1468-0297.00446
Grossman G, Helpman E (1994) Endogenous innovation in the theory of growth. J Econ Perspect 8(1):23–44. https://doi.org/10.1257/jep.8.1.23
Hansen B (1999) Threshold effects in non-dynamic panels: estimation, testing, and inference. J Econometrics 93(2):345–368. https://doi.org/10.1016/s0304-4076(99)00025-1
Herzer D (2022) The impact of domestic and foreign R&D on TFP in developing countries. World Dev 151.https://doi.org/10.1016/j.worlddev.2021.105754
Hu GG (2021) Is knowledge spillover from human capital investment a catalyst for technological innovation? The curious case of fourth industrial revolution in BRICS economies. Technol Forecast Soc Change 162.https://doi.org/10.1016/j.techfore.2020.120327
Khan S, Murshed M, Ozturk I et al (2022) The roles of energy efficiency improvement, renewable electricity production, and financial inclusion in stimulating environmental sustainability in the Next Eleven countries. Renew Energ 193:1164–1176. https://doi.org/10.1016/j.renene.2022.05.065
Kuang H, Xiong Y (2022) Could environmental regulations improve the quality of export products? Evidence from China’s implementation of pollutant discharge fee. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-21566-3
Le T, Pham H, Mai S et al (2022) Frontier academic research, industrial R&D and technological progress: the case of OECD countries. Technovation 114.https://doi.org/10.1016/j.technovation.2021.102436
Lee KH, Min B (2015) Green R&D for eco-innovation and its impact on carbon emissions and firm performance. J Clean Prod 108:534–542. https://doi.org/10.1016/j.jclepro.2015.05.114
Li R, Jiang R (2020) Investigating effect of R&D investment on decoupling environmental pressure from economic growth in the global top six carbon dioxide emitters. Sci Total Environ 740.https://doi.org/10.1016/j.scitotenv.2020.140053
Li L, McMurray A, Li X et al (2021) The diminishing marginal effect of R&D input and carbon emission mitigation. J Clean Prod 282.https://doi.org/10.1016/j.jclepro.2020.124423
Li J, Wu X (2022) The S-shaped relationship between R&D investment and green innovation after cross-border merge and acquisition: evidence from China. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-19739-1
Lindner I, Strulik H (2020) Innovation and inequality in a small world. Int Econ Rev 61(2):683–719. https://doi.org/10.1111/iere.12437
Liu ZK, Xin L (2019) Has China’s Belt and Road Initiative promoted its green total factor productivity? Evidence from primary provinces along the route. Energ Policy 129:360–369. https://doi.org/10.1016/j.enpol.2019.02.045
Malthus TR (2018) An essay on the principle of population. Yale University Press, New Haven. https://doi.org/10.12987/9780300231892
Mannasoo K, Hein H, Ruubel R (2018) The contributions of human capital, R&D spending and convergence to total factor productivity growth. Reg Stud 52(12):1598–1611. https://doi.org/10.1080/00343404.2018.1445848
Marshall A (2013) Principles of economics. Palgrave Macmillan, London. https://doi.org/10.1057/9781137375261
Mezzanotti F (2021) Roadblock to innovation: the role of patent litigation in corporate R&D. Manage Sci 67(12):7362–7390. https://doi.org/10.1287/mnsc.2020.3816
Murshed M (2020) An empirical analysis of the non-linear impacts of ICT-trade openness on renewable energy transition, energy efficiency, clean cooking fuel access and environmental sustainability in South Asia. Environ Sci Pollut Res 27(29):36254–36281. https://doi.org/10.1007/s11356-020-09497-3
Murshed M, Rahman MA, Alam MS et al (2021) The nexus between environmental regulations, economic growth, and environmental sustainability: linking environmental patents to ecological footprint reduction in South Asia. Environ Sci Pollut Res 28(36):49967–49988. https://doi.org/10.1007/s11356-021-13381-z
Murshed M, Apergis N, Alam MS et al (2022) The impacts of renewable energy, financial inclusivity, globalization, economic growth, and urbanization on carbon productivity: Evidence from net moderation and mediation effects of energy efficiency gains. Renew Energ 196:824–838. https://doi.org/10.1016/j.renene.2022.07.012
Nelson R (1959) The simple economics of basic scientific research. J Political Econy 67(3):297–306. https://doi.org/10.1086/258177
Nian H, Wang C, Yin H (2022) Size control or intensity control: a comparative study of two Common Environmental Regulations. J Regul Econ 61(3):169–190. https://doi.org/10.1007/s11149-022-09450-x
Oh D (2010) A global Malmquist-Luenberger productivity index. J Product Anal 34(3):183–197. https://doi.org/10.1007/s11123-010-0178-y
Parker G, van Alstyne M (2018) Innovation, openness, and platform control. Manage Sci 64(7):3015–3032. https://doi.org/10.1287/mnsc.2017.2757
Porter M (1991) America’s green strategy. Sci Am 264(4):193–246. https://doi.org/10.1038/scientificamerican0491-168
Porter M, van der Linde C (1995) Toward a new conception of the environment-competitiveness relationship. J Econ Perspect 9(4):97–118. https://doi.org/10.1257/jep.9.4.97
Romer P (1990) Endogenous technological change. J Political Econ 98(5):71–102. https://doi.org/10.1086/261725
Schumpeter JA (1934) The theory of economic development. Harvard economic studies 34. https://www.hup.harvard.edu/catalog.php?isbn=9780674879904
Shakib M, Yumei H, Rauf A et al (2022) Revisiting the energy-economy-environment relationships for attaining environmental sustainability: evidence from Belt and Road Initiative countries. Environ Sci Pollut Res 29(3):3808–3825. https://doi.org/10.1007/s11356-021-15860-9
Smeets-Kristkova Z, Gardebroek C, van Dijk M et al (2017) The impact of R&D on factor-augmenting technical change: an empirical assessment at the sector level. Econ Syst Res 29(3):385–417. https://doi.org/10.1080/09535314.2017.1316707
Song W, Han X (2022) Heterogeneous two-sided effects of different types of environmental regulations on carbon productivity in China. Sci Total Environ 841.https://doi.org/10.1016/j.scitotenv.2022.156769
Tchorzewska KB, Garcia-Quevedo J, Martinez-Ros E (2022) The heterogeneous effects of environmental taxation on green technologies. Res Policy 51(7). https://doi.org/10.1016/j.respol.2022.104541
Teece DJ (1986) Profiting from technological innovation: implications for integration, collaboration, licensing and public policy. Res Policy 15(6):285–305. https://doi.org/10.1016/0048-7333(86)90027-2
Teece DJ (2018) Profiting from innovation in the digital economy: enabling technologies, standards, and licensing models in the wireless world. Res Policy 47(8):1367–1387. https://doi.org/10.1016/j.respol.2017.01.015
Tombe T, Winter J (2015) Environmental policy and misallocation: the productivity effect of intensity standards. J Environ Econ Manag 72:137–163. https://doi.org/10.1016/j.jeem.2015.06.002
Turgot AR (2010) Reflections on the formation and distribution of wealth. Gale ECCO Publishing, Farmington Hills. https://www.amazon.com/Reflections-formation-distribution-wealth-Translated/dp/1170382940
Ugur M, Churchill SA, Luong HM (2020) What do we know about R&D spillovers and productivity? Meta-analysis evidence on heterogeneity and statistical power. Res Policy 49(1). https://doi.org/10.1016/j.respol.2019.103866
Wang Y, Deng, X, Zhang H et al (2022) Energy endowment, environmental regulation, and energy efficiency: evidence from China. Technol Forecast Soc Change 177.https://doi.org/10.1016/j.techfore.2022.121528
Yang M, Hong Y, Yang F (2022) The effects of mandatory energy efficiency policy on resource allocation efficiency: evidence from Chinese industrial sector. Econ Anal Policy 73:513–524. https://doi.org/10.1016/j.eap.2021.11.012
Yu YZ, Zhang XZ (2015) The factor endowments, the suitable innovation mode selection and TFP improvements. J Manag World 9:13–31+187
Zhang D (2021) Green credit regulation, induced R&D and green productivity: revisiting the Porter Hypothesis. Int Rev Financ Anal 75.https://doi.org/10.1016/j.irfa.2021.101723
Zhu S, Ye A (2018) Does the impact of China’s Outward Foreign Direct Investment on reverse green technology process differ across countries? Sustainability 10(11). https://doi.org/10.3390/su10113841
Zou H, Zhang Y (2022) Does environmental regulatory system drive the green development of China’s pollution-intensive industries? J Clean Prod 330.https://doi.org/10.1016/j.jclepro.2021.129832
Funding
This work is supported by National Natural Science Foundation of China (grant No. 72003009).
Author information
Authors and Affiliations
Contributions
Xi Zhang: conceptualization; methodology; formal analysis and investigation; supervision; funding acquisition; writing—review and editing.
Rui Li: methodology; formal analysis and investigation; resources; writing—original draft; writing—review and editing.
Jinglei Zhang: conceptualization; formal analysis and investigation; resources; writing—original draft; writing—review and editing.
Corresponding author
Ethics declarations
Ethics approval
Ethical approval was not required for this research.
Consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Arshian Sharif
Publisher's note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Zhang, X., Li, R. & Zhang, J. The diminishing marginal contribution of R&D investment on green technological progress: a case study of China’s manufacturing industry. Environ Sci Pollut Res 30, 14190–14199 (2023). https://doi.org/10.1007/s11356-022-23183-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-022-23183-6