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Does pollution levy standard reform promotes green innovation? Evidence from China

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Abstract

Taking advantage of the quasi-natural experiment generated by the adjustment of pollution levy standard in different Chinese provinces and utilizing detailed prefecture-level data from 2004 to 2014, we rigorously examine the effect of an increase in pollution levy standard on green innovation by adopting the difference-in-differences method. We find that an increase in pollution levy standard can significantly promote regional green innovation, with a magnitude of nearly 12.8%, as compared with their control group. Additionally, we find that financial development and intellectual property protection tend to reinforce the positive effects. Our study suggests that the Chinese government should strengthen its institutional structure to promote green innovation.

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Data availability

The dataset used and/or analyzed during the current study are available from the corresponding author on reasonable request.

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Funding

The Ministry of Education of Humanities and Social Science Project (22YJC790104); The Fundamental Research Funds for the Central Universities (JS2022ZSPY0034, JZ2022HGQA0182); and The Chinese National Social Science Fund (No. 21AZD036).

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Authors and Affiliations

  1. School of Business, East China University of Science and Technology, Shanghai, 200237, China

    Zhen Li

  2. School of Economics, Hefei University of Technology, Anhui, 230009, China

    Yanyan Shen

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  1. Zhen Li
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  2. Yanyan Shen
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Contributions

Zhen Li: conceptualization, formal analysis, investigation, methodology, theoretical analysis, software, validation, visualization, writing—original draft, and writing—review and editing. Yanyan Shen: conceptualization, data curation, project administration, writing—original draft supervision. All authors commented on revised versions of the manuscript. All authors read and approved the revised manuscript.

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Correspondence to Yanyan Shen.

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Li, Z., Shen, Y. Does pollution levy standard reform promotes green innovation? Evidence from China. Environ Sci Pollut Res 30, 35913–35928 (2023). https://doi.org/10.1007/s11356-022-24713-y

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