Abstract
Innovation is an imperative way of harmonizing the relationship between environmental protection and economic growth. Reasonably creating institutional pressure to stimulate the innovation vitality of enterprises is a crucial issue in promoting the modernization of ecological environment governance systems and governance capacity. This paper considered China’s new environmental protection law (NEPL) as a quasi-natural experiment to evaluate the impact of environmental regulation on enterprise eco-innovation in a difference-in-difference (DID) framework. It also identifies the conditions of the NEPL that encourage enterprise eco-innovation. We found that the NEPL significantly hinders the level of enterprise eco-innovation. This inhibition is mainly associated with invention patents with high degrees of innovation rather than utility model patents, resulting from tightening financing constraints. Further, when considering enterprise heterogeneity in terms of ownership, size, and cost transfer ability, private and small-sized enterprises and enterprises with higher cost transfer ability are more affected by the implementation of the NEPL. Furthermore, enterprises with a better business environment are more likely to perform innovation activities. Our findings have valuable implications for evaluating the effects of policy implementation more scientifically and comprehensively, and consequently, promoting the “innovation compensation effect” of environmental regulation.
Similar content being viewed by others
Data availability
The datasets used and analyzed during the current study are available from the corresponding author on reasonable request.
References
Antweiler W, Copeland BR, Taylor MS (2001) Is free trade good for the environment. Am Econ Rev 91(4):877–908. https://doi.org/10.1257/aer.91.4.877
Bi Q, Yu L (2019) Environmental tax and enterprise technological innovation: promotion or suppression? Sci Res Manag 40(12):116–125 (in Chinese). https://doi.org/10.19571/j.cnki.1000-2995.2019.12.012
Brunnermeier SB, Cohen MA (2003) Determinants of environmental innovation in US manufacturing industries. J Environ Econ Manag 45(2):278–293. https://doi.org/10.1016/S0095-0696(02)00058-X
Cai W, Li Q (2019) Dual effect of environmental regulation on enterprise’s eco-technology innovation. Sci Res Manag 40(10):87–95 (in Chinese). https://doi.org/10.19571/j.cnki.1000-2995.2019.10.008
Cai X, Lu Y, Wu M, Yu L (2016) Does environmental regulation drive away inbound foreign direct investment? Evidence from a quasi-natural experiment in China. J Dev Econ 123(1):73–85. https://doi.org/10.1016/j.jdeveco.2016.08.003
Cui G, Jiang Y (2019) The influence of environmental regulation on the behavior of enterprise environmental governance: based on a quasi-natural experiment of new environmental protection law. Bus Manag J 41(10):54–72 (in Chinese). https://doi.org/10.19616/j.cnki.bmj.2019.10.004
Fan H, Zhou X (2020) A research on the effect mechanism of managerial ownership on innovation performance——the mediating role based on financial constraints. Sci Res Manag 41(03):52–60 (in Chinese). https://doi.org/10.19571/j.cnki.1000-2995.2020.03.006
Fu J, Zhao C (2014) Will environmental regulation affect export trade of pollution intensive industries: analysis based on China’s panel data and Trade Gravity Model (in Chinese). Economist (02):47–58. https://doi.org/10.16158/j.cnki.51-1312/f.2014.02.001
Gao X, Yuan K (2020) Cleaner production environment regulation and technology complexity of enterprise export——micro evidence and influencing mechanisms. J Int Trade (02):93–109 (in Chinese). https://doi.org/10.13510/j.cnki.jit.2020.02.007
Hu J, Huang Q, Pan X (2020a) Carbon emission trading system and firms’ innovation quality: suppression or promotion. China Popul Resour Environ 30(02):49–59 (in Chinese)
Hu J, Huang N, Shen H (2020b) Can market-incentive environmental regulation promote corporate innovation? A natural experiment based on China’s carbon emissions trading mechanism. J Financ Res (01):171–189 (in Chinese). https://doi.org/CNKI:SUN:JRYJ.0.2020-01-010
Jacobson LS, LaLonde RJ, Sullivan DG (1993) Earnings losses of displaced workers. Am Econ Rev 83(4):685–709.
Jiang X, Xu C (2015) Environmental regulation, corporate governance and environmental protection investment. Financ Account Mon (27):9–13 (in Chinese). https://doi.org/10.19641/j.cnki.42-1290/f.2015.27.002
Li L, Tao F (2012) Selection of optimal environmental regulation intensity for Chinese manufacturing industry——based on the green TFP perspective. China Ind Econ (05):70–82 (in Chinese). https://doi.org/10.19581/j.cnki.ciejournal.2012.05.006
Li B, Wang B (2019) Has the implementation of the New Environmental Protection Law increased the company's technological innovation investment? Research Based on PSM-DID Method. J Audit Econ 34(01):87–96 (in Chinese). https://doi.org/10.3969/j.issn.1004-4833.2019.01.009
Li Y, Wen Y (2016) A study on the efficiency of emission trading policy in China--empirical analysis based on natural experiment. Economist (05):19–28 (in Chinese). https://doi.org/10.16158/j.cnki.51-1312/f.2016.05.004
Lu Y (2009) Do Environmental regulations influence the competitiveness of pollution-intensive products? Econ Res J 44(04):28–40 (in Chinese) . https://doi.org/CNKI:SUN:JJYJ.0.2009-04-005
Lv X (2020) Financing constraints, equity structure and innovation investment—data from China’s gem listed companies. Dissertation, Zhejiang Gongshang University.https://doi.org/10.27462/d.cnki.ghzhc.2020.000090
Porter ME, Linde C (1995) Green and comparative: ending the stalemate. Harv Bus Rev 73(5):120–134.
Qi J, Zhang Z (2021) Profit-driven or innovation-driven? The emission trading mechanism and Chinese enterprises' OFDI. Ind Econ Res (02):15–29 (in Chinese). https://doi.org/10.13269/j.cnki.ier.2021.02.002
Qi S, Lin S, Cui J (2018) Do environmental rights trading schemes induce green innovation? Evidence from listed firms in China. Econ Res J 53(12):129–143 (in Chinese). https://doi.org/CNKI:SUN:JJYJ.0.2018-12-010
Ren S, Zheng J, Liu D, Chen X (2019) Does emissions trading system improve firm's total factor productivity——evidence from Chinese listed companies. China Ind Econ (05):5–23 (in Chinese) . https://doi.org/10.19581/j.cnki.ciejournal.2019.05.001
Rennings K (2000) Redefining innovation—eco-innovation research and the contribution from ecological economics. Ecol Econ 32(2):319–332. https://doi.org/10.1016/S0921-8009(99)00112-3
Shen N, Liu F (2012) Can intensive environmental regulation promote technological innovation?: porter hypothesis reexamined. China Soft Sci (04):49–59 (in Chinese). https://doi.org/CNKI:SUN:ZGRK.0.2012-04-007
Tang H, Liu J, Wu J (2020) The impact of command-and-control environmental regulation on enterprise total factor productivity: a quasi-natural experiment based on China’s “Two Control Zone” policy. J Clean Prod 254:1–14. https://doi.org/10.1016/j.jclepro.2020.120011
Topalova P (2010) Factor immobility and regional impacts of trade liberalization: evidence on poverty from India. Am Econ J Appl Econ 2(4):1–41. https://doi.org/10.1257/app.2.4.1
Tu Z, Chen R (2015) Can emissions trading scheme achieve the Porter effect in China?. Econ Res J 50(07):160–173 (in Chinese). https://doi.org/CNKI:SUN:JJYJ.0.2015-07-013
Wen Z, Ye B (2014) Analyses of mediating effects: the development of methods and models. Adv Psychol Sci 22(05):731–745 (in Chinese). https://doi.org/10.3724/SP.J.1042.2014.00731
Zhang H (2020) Can low-carbon city construction reduce carbon emissions? Evidence from a quasi-natural experiment. Bus Manag J 42(06):25–41 (in Chinese). https://doi.org/10.19616/j.cnki.bmj.2020.06.002
Zhang C, Lv Y (2018) Green production regulation and enterprise R&D innovation: impact and mechanism research. Bus Manag J 40(01):71–91 (in Chinese). https://doi.org/10.19616/j.cnki.bmj.2018.01.005
Zhang Z, Zhao G (2012) FDI, environmental regulation and technological progress. J Quant Tech Econ 29(04):19–32 (in Chinese). https://doi.org/10.13653/j.cnki.jqte.2012.04.006
Zhang C, Lu Y, Guo L, Yu T (2011) The intensity of environmental regulation and technological progress of production. Econ Res J 46(02):113–124 (in Chinese). https://doi.org/CNKI:SUN:JJYJ.0.2011-02-010
Zhang G, Qiu S, Zhang W (2018) Does strengthening environmental regulations affect corporate R&D innovation: an empirical analysis based on the implementation of the New Environmental Protection Law of PRC. J Guangdong Univ Financ Econ 33(06):80–88+101 (in Chinese).
Zheng T, Bai X (2019) Re-examination of environmental regulation and industrial international competitiveness from the perspective of dynamic evolutionary game. Ind Econ Rev 10(06):70–86 (in Chinese). https://doi.org/10.14007/j.cnki.cjpl.2019.06.006
Acknowledgements
We thank the anonymous referees for their insightful comments that improved the paper.
Funding
This work was supported by the National Natural Science Foundation of China (71974032).
Author information
Authors and Affiliations
Contributions
Wugan Cai contributed to the conceptualization, methodology, funding acquisition, investigation, supervision, validation, project administration, and writing (review and editing). Fengru Xu contributed to data curation, formal analysis, software, methodology, investigation, writing (original draft), and visualization. All the authors read and approved the final manuscript.
Corresponding author
Ethics declarations
Ethics approval and consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The authors declare no competing interests.
Additional information
Responsible editor: Eyup Dogan
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Cai, W., Xu, F. The impact of the new environmental protection law on eco-innovation: evidence from green patent data of Chinese listed companies. Environ Sci Pollut Res 29, 10047–10062 (2022). https://doi.org/10.1007/s11356-021-16365-1
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-021-16365-1