Regulation and Environmental Innovation: Effect and Regional Disparities in China

Conference paper
Part of the Lecture Notes in Electrical Engineering book series (LNEE, volume 236)


Based on improved Griliches-Jaffe knowledge production function, this paper analyzes the effect of government regulation on environmental innovation by employing a panel dataset that covers 30 Chinese provinces from 1998 to 2006. We find that the regulation pressure (as measured by the investment in the treatment of industrial pollution) has significant and positive impact on environmental innovation (as measured by environmental patent applications) at the national level. We also find that there are distinct regional disparities between effects of environmental regulation on innovation. Only the regulation pressure in eastern China has positive and statistically significant impact on environmental innovation, while the regulation pressure in western and central China has insignificant effect on environmental innovation. More importantly, we show that the regional innovation conditions such as innovation input, export pressure, economic growth rate, and educational expenditure share are more important factors to affect environmental innovation than environmental regulation.


Environmental regulation Environmental innovation Patent Regional disparity 



This work is supported by National Social Science Foundation of China (12CJL040) and Humanities and Social Science Youth Foundation, Ministry of Education of China (10XJC630004).


  1. 1.
    Porter, M.E.: America’s green strategy. Sci. Am. 264(4), 168 (1991)Google Scholar
  2. 2.
    Porter, M.E., Van der Linde, C.: Toward a new conception of the environment competitiveness relationship. J. Econ. Perspect. 9(4), 97–118 (1995)CrossRefGoogle Scholar
  3. 3.
    Lanjouw, J.O., Mody, A.: Innovation and the international diffusion of environmentally responsive technology. Res. Policy 25, 549–571 (1996)CrossRefGoogle Scholar
  4. 4.
    Jaffe, A.B., Palmer, K.: Environmental regulation and innovation: a panel data study. Rev. Econ. Stat. 79(4), 610–619 (1997)CrossRefGoogle Scholar
  5. 5.
    Brunnermeier, S.B., Cohen, M.A.: Determinants of environmental innovation in US manufacturing industries. J. Environ. Econ. Manag. 45, 278–293 (2003)CrossRefMATHGoogle Scholar
  6. 6.
    Pascual, B., Liliana, G., Andrea, F., et al.: Can institutional forces create competitive advantage? an empirical examination of environmental innovation. IESE Business School Working, pp. 723 (2007)Google Scholar
  7. 7.
    Yarime, M.: Promoting green innovation or prolonging the existing technology: regulation and technological change in the Chlor-Alkali industry in Japan and Europe. J. Ind. Ecol. 11(4), 117–139 (2007)CrossRefGoogle Scholar
  8. 8.
    Shen, N., Liu, F.: Can intensive environmental regulation promote technological innovation? Porter hypothesis reexamined. China. Soft. Sci. 4, 49–59 (2012)Google Scholar
  9. 9.
    Wang, G., Wang, D.: Porter hypothesis, environmental regulation and enterprises technological innovation: the comparative analysis between central China and eastern China. China. Soft. Sci. 1, 100–112 (2011)Google Scholar
  10. 10.
    Griliches, Z.: Issues in assessing the contribution of R&D to productivity growth. Bell J. Econ. 10, 92–116 (1979)CrossRefGoogle Scholar
  11. 11.
    Jaffe, A.B.: Real effects of academic research. Am. Econ. Rev. 79(5), 957–970 (1989)Google Scholar
  12. 12.
    Acs, Z.J., Anselin, L., Varga, A.: Patents and innovation counts as measures of regional production of new knowledge. Res. Policy 31, 1069–1085 (2002)CrossRefGoogle Scholar
  13. 13.
    Fritsch, M., Slavtchev, V.: Universities and innovation in space. Ind. Innov. 14(2), 201–218 (2007)CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.School of Management and EconomicsUniversity of Electronic Science and Technology of ChinaChengduChina

Personalised recommendations