Wang, Yuxing; Ye, Wenhui; Wang, Bichun
A icle
The impac o en i onmen al egula ion on echnological inno a ion
o en e p ises: Based on empi ical e idences o he implemen a ion o
pollu ion cha ges in China
Economics: The Open-Access, Open-Assessmen Jou nal
P o ided in Coope a ion wi h:
De G uy e B ill
Sugges ed Ci a ion: Wang, Yuxing; Ye, Wenhui; Wang, Bichun (2024) : The impac o en i onmen al
egula ion on echnological inno a ion o en e p ises: Based on empi ical e idences o he
implemen a ion o pollu ion cha ges in China, Economics: The Open-Access, Open-Assessmen
Jou nal, ISSN 1864-6042, De G uy e , Be lin, Vol. 18, Iss. 1, pp. 1-16,
h ps://doi.o g/10.1515/econ-2022-0068
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Resea ch A icle
Yuxing Wang*, Wenhui Ye, and Bichun Wang
The Impac o En i onmen al Regula ion on
Technological Inno a ion o En e p ises: Based
on Empi ical E idences o he Implemen a ion o
Pollu ion Cha ges in China
h ps://doi.o g/10.1515/econ-2022-0068
ecei ed May 12, 2023; accep ed No embe 08, 2023
Abs ac : En i onmen al p o ec ion is closely ela ed o
high-quali y economic de elopmen s. Based on he ma ching
o mic o-da abases om 2000 o 2008, his s udy used he
“Regula ions on he Collec ion and Use o Pollu ion Fees”
policy implemen ed in China in 2003 as he exogenous impac
o cons uc he in ensi y Diffe ence in Diffe ences model in
o de o in es iga e he effec s o pollu an discha ge ee on
echnological inno a ion o en e p ises and he unde lying
mechanisms. The esul s showed ha go e nmen al en i on-
men al egula ions significan ly imp o ed he le el o ech-
nological inno a ion o en e p ises, and he conclusion was
s ill alid a e a se ies o obus ness es s. The esul s o
he pa allel end e ified he a ionali y o he diffe en ial
se ing and he dynamic effec s showed ha he pollu an
discha ge eeshadacon inuousp omo ingeffec on he ech-
nological inno a ion o en e p ises. The esul s o he placebo
es s ejec ed he o iginal hypo hesis o he mis aken model.
The mechanism e ifica ions e ealed ha he s eng hening
o en i onmen al egula ion by he go e nmen ac ed on he
inno a ion le el o en e p ises h ough he wo mechanisms,
i.e., he p omo ion o en e p ises’fixed asse in es men s and
go e nmen subsidies, and finally imp o ed he en e p ises’
echnological inno a ion le els.
Keywo ds: en i onmen al p o ec ion egula ion, en e p ise
inno a ion, pollu an discha ge ees, diffe ences-in-diffe ences
1 In oduc ion
The epo o he Pa y’s 20 h Na ional Cong ess p oposed
“p omo ing g een de elopmen and p omo ing ha mo-
nious coexis ence be ween human and na u e,”which
highligh ed he need o u he p omo e he p e en ion
o en i onmen al pollu ion, o ca y ou he ea men s
o new pollu an s, and o p omo e he imp o emen s o
u ban and u al li ing en i onmen s. As we can see, p o-
mo ing economic de elopmen also needs o p omo e he
g een and heal hy de elopmen o socie y and he ecolo-
gical en i onmen s. As he saying goes, “lucid wa e s and
lush moun ains a e in aluable asse s.”We should s ick o
he pa h o g een de elopmen and join ly build a ounda-
ion o ecological ci iliza ion. In China, he will o he
go e nmen plays a majo ole in en i onmen al egula-
ions. On he one hand, he go e nmen as he designe o
en i onmen al egula ions es ic s he beha io s o ma ke
playe s. On he o he hand, he cen al go e nmen will also
send en i onmen al inspec ion eams o supe ise and
inspec he implemen a ions o cen al en i onmen al poli-
cies by local go e nmen s. As a e y impo an pa o
socie y, he main pu pose o en e p ises is o make p ofi s.
En i onmen al egula o y policies can affec hei cos s and
p ofi s, hus ha ing a significan impac on hem. In 2003,
he Chinese go e nmen implemen ed he Regula ions on
he Managemen o he Collec ion and Use o Pollu an
Discha ge Fees. No ably, as he fi s ela ed policy on he
na ional le el, he en i onmen al egula ions p o ide us
wi h a good oppo uni y o quasi-na u al expe imen s o
iden i y he impac on mic o ma ke playe s and help us o
iden i y he impac on en e p ise echnological inno a ions
by using Diffe ence in Diffe ences (DID) me hod.
Acco ding o adi ional economic heo ies, inc easing
in es men s in en i onmen al p o ec ion will inc ease he
ope a ing cos s and social alues, and educe he o e all
compe i i eness o en e p ises, which may hinde hei
* Co esponding au ho : Yuxing Wang, School o Economics, Yunnan
Uni e si y o Finance and Economics, Kunming 650221, China,
e-mail: [email p o ec ed]
Wenhui Ye: School o Economics, Yunnan Uni e si y o Finance and
Economics, Kunming 650221, China
Bichun Wang: School o S a is ics and Ma hema ics, Yunnan Uni e si y
o Finance and Economics, Kunming 650221, China
Economics 2024; 18: 20220068
Open Access. © 2024 he au ho (s), published by De G uy e . This wo k is licensed unde he C ea i e Commons A ibu ion 4.0 In e na ional License.
u he de elopmen (Wang & Wan, 2011). Howe e , Po e ’s
hypo hesis (Po e & an de Linde, 1995) belie es ha en e -
p ises’compliance wi h he go e nmen ’s en i onmen al eg-
ula ions no only does no inc ease hei ope a ing cos s bu
also p omo es hei echnological inno a ion and b ings
g ea e benefi s, hus occupying a compe i i e posi ion o
en e p ises in he in e na ional ma ke . Can he en i on-
men al egula ions o mula ed by he Chinese go e nmen
p omo e he inno a ion o en e p ise? Wha is he impac
o en i onmen al egula ion on mic o-ma ke playe s? These
a e he ques ions o be answe ed in his s udy. We ook he
pollu an discha ge ee implemen ed by he Chinese go e n-
men in 2003 as a quasi-na u al expe imen and used he
ele an da a o he indus ial en e p ise da abase, he pollu-
ion da abase, and he en e p ise inno a ion da abase o
China o s udy he impac o en i onmen al p o ec ion ules
on en e p ise echnological inno a ion, which migh help o
pu o wa d ele an policy sugges ions based on ou s udy.
This s udy iden ifies he causal effec s o en i onmen al
p o ec ion ax om h ee aspec s: esea ch pe spec i e,
esea ch me hod, and ac ion mechanism. To iden i y he
causal effec s, we ook he p omulga ion o he Regula ions
on he Adminis a ion o he Collec ion and Use o Pollu an
Discha ge Fee (he eina e e e ed o as “Pollu an Discha ge
Fee”) in 2003 as a quasi-na u al expe imen and used policy
e alua ions o ge he impac on en e p ise inno a ion. In
e ms o esea ch me hods, we used he DID me hod o ana-
lyze he en e p ise mic o da abase, a oided he endogenei y
and missing a iable bias, and hus ob ained a obus consis-
en es ima o . In e ms o he mechanisms, we explo ed he
mechanism o en e p ise in es men and go e nmen sub-
sidy, and hen explo ed he impac on inno a ion om he
pe spec i e o en e p ise ope a ion decisions, which a e
impo an ma ginal con ibu ions o his s udy.
The ollowing con en s o his manusc ip a e he ins i-
u ional backg ound and li e a u e e iew (Sec ion 2), he
mechanism analysis (Sec ion 3), he da a p ocessing and
model se ing (Sec ion 4), he basic eg ession and obus -
ness es s (Sec ion 5), he he e ogenei y analysis (Sec ion 6),
he mechanism e ifica ions (Sec ion 7), and he conclu-
sions and policy ecommenda ions (Sec ion 8).
2 Ins i u ional Backg ound and
Li e a u e Re iew
2.1 Ins i u ional Backg ound
Since he wen y-fi s cen u y, he awa eness o en i on-
men al p o ec ion has been deeply oo ed in a ious fields
such as economy, cul u e, and poli ics. As ea ly as 1979,
China p omulga ed he “En i onmen al P o ec ion Law
o he People’s Republic o China (T ial)” o he fi s
ime and began o collec a ce ain amoun o pollu ion
discha ge ees, bu his is only implemen ed in local a eas
and egions and has no been eally ca ied ou h oughou
China. In 1982, he In e im Measu es o Collec ing Pollu an
Discha ge Fees we e subsequen ly p omulga ed, which we e
no well implemen ed due o a ious subjec i e and objec i e
limi a ions. Un il he pa y’s 16 na ional Cong ess, a new gen-
e a ion o cen al leade ship p oposed “ha monious de elop-
men o human and na u e,”and paid g ea a en ion o
ecological p o ec ion, and implemen ed he “Regula ions on
he collec ion and use o pollu ion ees”in 2003, which was a
miles one in he field o en i onmen al p o ec ion, ma king
he beginning o he na ionwide en i onmen al egula ion
implemen a ion. As i was issued by he S a e Council, he
implemen a ion was manda o y and igid h oughou China,
and he punishmen o pollu ion emission o en e p ises was
e y se e e s ipula ing one– h ee imes fines and o ced sus-
pension o p oduc ion. This is he fi s ime ha legisla ion has
been used o egula e en i onmen al pollu ion and b ing
ou ema kable ou comes in China. The JiangSu P o incial
Depa men o En i onmen al P o ec ion has o mula ed
he “Jiangsu P o ince Measu es o he Issuance and
Managemen o Pollu an Discha ge Pe mi s (T ial)” o
s anda dize he beha io o pollu an discha ge pe mi s
and s eng hen he managemen o pollu an discha ge
pe mi s. Th ough he implemen a ion o policies, he
inno a ion le el o en e p ises in he egion has been
significan ly imp o ed.
We collec ed da a ela ed o pollu ion discha ge om
2001 o 2008 om he official websi e o he Minis y o
Ecological and En i onmen al P o ec ion o China. Figu es 1
and 2 show he con en o hea y me als, and he emission o
sul u dioxide and indus ial dus in was ewa e discha ge,
espec i ely. I can be seen om he figu e ha be o e he
in oduc ion o go e nmen en i onmen al egula ion in
2003, he emission o pollu an s was on he ise. Howe e ,
a e he go e nmen imposed he discha ge ee in 2003, he
discha ge o pollu an s such as was ewa e , was e gas, and
indus ial dus dec eased significan ly, indica ing ha en e -
p ises significan ly educed he discha ge o pollu an s a e
he go e nmen imposed he discha ge ee, and he dis-
cha ge egula ions played a significan ole in educing
pollu ion and p o ec ing he en i onmen . A e he imple-
men a ion o he Chinese go e nmen ’s en i onmen al p o-
ec ion policies in 2003, he pollu an emissions o en e p ises
significan ly dec eased. Howe e , his undoub edly inc eased
he cos bu den on en e p ises. So wha impac does his ha e
on hei echnological inno a ion.
2Yuxing Wang e al.
2.2 Li e a u e Re iew
2.2.1 The Impac o En i onmen al Regula ion on he
Pe o mance o En e p ises
Op imizing he business en i onmen s o en e p ises has a
g ea impac on en e p ise pe o mance, while he impac
o en i onmen al egula ion on en e p ise pe o mance
emains unclea . Cu en esea ch esul s a e mainly ca e-
go ized in o he ollowing wo aspec s. Fi s , he implemen-
a ion o en i onmen al egula ions by he go e nmen
will inc ease he p oduc ion cos o en e p ises, which
has a nega i e impac on he pe o mance o en e p ises.
Jie e al. (2014) ound ha go e nmen en i onmen al
egula ion would inc ease he cos o p oduc ion and ope a-
ion o en e p ises, hus ha ing a nega i e impac on en e -
p ise pe o mance. Second, go e nmen en i onmen al
egula ion has a posi i e impac on en e p ise pe o -
mance by p omo ing echnological inno a ions and inc easing
en e p ise p oduc ion efficiencies. Ma e al. (2012) ound ha
he posi i e effec o en i onmen al egula ion h ough ech-
nological inno a ion exceeded he nega i e effec caused by
inc eased cos , which finally led o he inc ease o indus ial
pe o mance. Yang and Peng (2021) ound ha en i onmen al
egula ions ha e a posi i e impac on co po a e pe o mance.
Simila ly, Liu Xuezhi e al. (Liu & Duan, 2021) used he DID
Figu e 1: Hea y me als in was ewa e discha ge om 2001 o 2008 in China.
Figu e 2: The emission o sul u dioxide and indus ial dus om 2001 o 2008 in China.
Impac o En i onmen al Regula ion on Technological Inno a ion o En e p ises 3
model o e i y he posi i e impac o en i onmen al egula-
ions in he cu en pe iod on en e p ise pe o mance in he
ollowing pe iod. Ja eed e al. (2020) s udied he manu ac-
u ing indus y in Pakis an and ound ha a e conside ing
he deg ee o p oduc ma ke compe i ion, he p omo ing
effec o en i onmen al egula ions on co po a e pe o mance
is s eng hened; Li e al. (2020) ound ha a e conside ing he
impac o o ganiza ional edundancy, i s eng hened he
effec o olun a y egula ion on p omo ing g een inno a ion.
2.2.2 The Impac o En i onmen al Regula ion on he
Inno a ions o En e p ises
Technological inno a ions a e he majo con en and he
co e d i ing o ce o he de elopmen o en e p ise. Due o
i s high in es men , long ime cycle, e c., en e p ise ech-
nology inno a ion le el is g ea ly influenced by in e nal
esou ce alloca ion, ex e nal social financial suppo , and
local en i onmen al policies. The e o e, he changes in he
in ensi y o egional en i onmen al egula ion will ha e a
g ea impac on hep oduc ioncos andfinancing cons ain s
o en e p ises, which migh u he affec he echnological
inno a ion le el o en e p ises. Repo edly, en i onmen al
egula ion migh educe he capi al flow and inc ease he
financing cons ain s by inc easing he p oduc ion cos s o
en e p ises, hus inhibi ing he echnological inno a ion o
en e p ises (Bi & Li, 2020;Liu&Ran,2016).
Domes ic and o eign schola s ha e made ich achie e-
men s in he esea ch on he impac o en i onmen al eg-
ula ion policies on en e p ise inno a ions, bu he e is no
unified opinion. Some schola s admi ed ha en i onmen al
egula ions such as emission ax and pollu ion pe mi ha e
a posi i e impac on p omo ing he echnological inno a ion
o en e p ises (Villegas-Palacio & Co ia, 2010). Langpap and
Shimshack (2010) ook wa e pollu ion ea men in he
Uni ed S a es as he esea ch objec and ound ha public
pa icipa ion egula ion ools played a c ucial ole in p e-
en ing wa e pollu ion. Howe e , some o he schola s hold
opposi e iews on his issue. On he one hand, he imposi-
ion o pollu ion ax and he imp o emen o emission s an-
da ds bo h educe he expec ed e u ns o en e p ises’
esea ch and de elopmen , which makes en e p ises ha e
o educe hei in es men in esea ch and de elopmen .
The e o e, s ic en i onmen al egula ion will educe en e -
p ises’ echnological inno a ions (An weile e al., 2001). On
he o he hand, en i onmen al egula ion is equi alen o
imposing new cons ain s on he p oduc ion decision-making
o en e p ises, which will hinde he echnological p og ess o
en e p ises (Becke , 2011; Lanoie e al., 2011). O he schola s
belie e ha he impac o en i onmen al egula ion on
echnological inno a ion depends on he game o diffe en
o ces. Acco ding o Po e ’s hypo hesis, he impac o en i -
onmen al egula ion on en e p ise inno a ion depends on
he game be ween “inno a ion compensa ion effec ”and
“compliance cos effec .”App op ia e en i onmen al egula-
ion policies can educe he unce ain y o en e p ises’
u u e expec a ions h ough s ic policies, and o ce en e -
p ises backwa d o ca y ou echnological inno a ions. In
his case, he p oduc ion capaci y o en e p ises can also be
imp o ed. Specifically, Calel and Dechezlep e e (2011) ook
he Emissions T ading Sys em o he Eu opean Union as he
esea ch objec and ound ha he echnological inno a ion
le el o en e p ises egula ed by en i onmen al egula ions
had been imp o ed.
Some schola s a e conce ned ha he in ensi y o
en i onmen al egula ions will change in s ages wi h di -
e en ime (Tong & Zhang, 2012). Specifically, al hough he
cos o en e p ises will inc ease in he sho e m along
wi h he inc eases o he in ensi y o en i onmen al egu-
la ions (Miao & Su, 2019; Zhao e al., 2019), he en e p ises
will be o ced o imp o e hei indus ial s uc u es and
echnological inno a ion le els in he long e m (Den &
Wang, 2021; L & Huang, 2021). The e o e, schola s ha e
conduc ed ele an s udies on he nonlinea ela ionship
be ween en i onmen al egula ion in ensi y and en e -
p ise inno a ion and ound ha he ela ionship shows a
significan U-shaped cu e (Feng & Jia, 2021; Fan e al., 2021;
Wang e al., 2021), while o he schola s ound ha he
ela ionship be ween en i onmen al egula ion and en e -
p ise echnological inno a ion p esen s an in e ed “U”
shaped cu e and an in e ed “N”shaped cu e (Wang &
Liu, 2014; Yu e al., 2019; You & Li, 2022). Kesidou e al.
a gue ha manu ac u ing en e p ises loca ed in egions
wi h s ic e en i onmen al egula ions ha e s onge
echnological inno a ion effec s and can gene a e mo e
g een pa en s. Sun e al. conduc ed a s udy using da a
om 132 companies in 16 highly pollu ing indus ies in
China and ound ha en i onmen al egula ions ha e a
p omo ing effec on g een echnology p og ess, and com-
panies pay mo e a en ion o esea ch and de elopmen
in es men in en i onmen al p o ec ion; Lanoie e al. s u-
died en e p ises in se en OECD coun ies and ound ha
s ic egula ions can p omo e inno a ion (Kesidou & Wu,
2020; Lanoie e al., 2011; Sun e al., 2019).
P esen ly, he e a e many ypes o en i onmen al eg-
ula ions implemen ed in China, and diffe en ypes o
en i onmen al egula ions ha e significan he e ogenei y
on he inno a ion le el o en e p ises. Among hem, he
numbe o en i onmen al legisla ion and he amoun o
pollu an discha ge cha ges ha e a significan effec on he
imp o emen o en e p ises’g een echnology inno a ion
4Yuxing Wang e al.
(Hua & Li, 2022; Jin e al., 2022; Zhang e al., 2021). In addi ion,
he implemen a ion o en i onmen al egula ions is g ea ly
influenced by he go e nmen ’sfinancial policies in China.
The financial sys em in China is a combined sys em o poli-
ical cen aliza ion and economic decen aliza ion, which is
influenced by he p essu e o “p omo ion ou namen s”o
a ious egions. Local go e nmen s should no only main-
ain he g ow h o local economies bu also p o ec local
en i onmen s. The e o e, he impac o en i onmen al eg-
ula ion on he le el o echnological inno a ion o en e -
p ises is closely ela ed o he financial policies o local go -
e nmen s (Wu & You, 2019).
Collec i ely, he e is no unified conclusion ye abou he
ela ionship be ween en i onmen al p o ec ion egula ion
and en e p ise echnological inno a ion based on cu en
s udies, and he con en o causal in e ence was no in ol ed
in ele an discussions, which has a s ong endogenei y p o-
blem. In e ms o he mechanisms, he cu en s udies ha e
no explo ed he impac on en e p ise echnological inno a-
ion om he pe spec i e o en e p ise ope a ion decisions.
(G iffi h & Reenen, 2021; Guo & Liang, 2022).
3 Mechanisms Analysis
In o de o pu sue mo e p ofi s, en e p ises will cons an ly
upda e echnologies and imp o e he le el o inno a ion.
Gene ally speaking, go e nmen en i onmen al egula ions
affec he expo beha io s o en e p ises mainly by encou a-
ging en e p ise inno a ion and p omo ing he inc ease o
en e p ise in e media e p oduc inpu , so as o p omo e
en e p ises o inc ease he added alues o expo p oduc s
and hus imp o e he quali y o expo p oduc s (Figu e 3).
3.1 En e p ise In es men Mechanism
The na ionwide en i onmen al egula ions a e equi alen
o s ong cons ain s on companies, which o ce companies
o make ela i e eac ions unde such condi ions. On he
one hand, he o e all cos s o en e p ises will inc ease
acco ding o go e nmen ’s s ic en i onmen al egula-
ions. B iefly, en e p ises ha e o inc ease in es men s in
sewage equipmen and imp o e p oduc ion efficiencies in
o de o educe p oduc ion cos s, which esul s in he
inc ease o he fixed asse s o en e p ises in he book as
he fixed asse s in es men s. On he o he hand, en e -
p ises will pay mo e a en ion o he efficiencies o capi al
use, especially he efficiencies o in es men s. B iefly, en e -
p ises would use limi ed esou ces in ensi ely in he p o-
duc ion fields, educe he uni ene gy consump ion and
emissions o p oduc s, inc ease he uni in es men efficien-
cies o p oduc s, and use he leas esou ces o c ea e he
maximum alue. In his chain, he go e nmen ’sen i on-
men al egula ions will inc ease he in es men in fixed
asse s o en e p ises. The inc ease o fixed asse s imp o es
he book alue o en e p ises and is conduci e o p omo ing
uni p oduc in es men efficiencies, imp o ing he inno a-
ion deg ee and echnological con en o en e p ises, and
finally p omo ing he imp o emen o en e p ise echnolo-
gical inno a ions.
3.2 Go e nmen Subsidy Mechanism
No ably, he In e im Measu es o Collec ing Pollu ion
Cha ges issued in China in 2003 p o ided incen i es o
en e p ises ha complied wi h en i onmen al p o ec ion
emission s anda ds o olun a ily educed pollu ion emis-
sions. Mo eo e , he pu chase o ene gy-sa ing and emis-
sion- educ ion equipmen can be deduc ed om he inpu
ax. All hese ha e g ea ly educed he p oduc ion cos s o
en e p ises. On he one hand, he go e nmen ’s subsidized
policies and subsidies o en e p ises’en i onmen al p o-
ec ion educed he cos o en e p ises, inc eased he p o-
po ion o ac o inpu , imp o ed he p oduc ion efficiencies
o en e p ises, and p omo ed he en husiasm o en e p ises
o in es in he field o echnological inno a ions. On he
Figu e 3: Mechanisms o en i onmen al egula ion on he le el o en e p ise inno a ion.
Impac o En i onmen al Regula ion on Technological Inno a ion o En e p ises 5
o he hand, he unds a ailable o en e p ises ha e ac ually
inc eased, and mo e unds can be used in he field o ech-
nology in es men and esea ch s udies. Unde such condi-
ions, en e p ises can be encou aged o imp o e he le el o
echnological inno a ion.
4 Da a P ocessing and Empi ical
Model
4.1 Da a Sou ces
In his s udy, he China Indus ial En e p ise Da abase,
China En e p ise Pollu ion Da abase, and China En e p ise
Inno a ion Da abase om 2000 o 2008 we e used including
a o al o 32,035 obse ed alues. B iefly, he da abase o
Chinese indus ial en e p ises con ains he basic in o ma-
ion o s a e-owned en e p ises and p i a e en e p ises
abo e he designa ed size, including financial indica o s,
egis a ion in o ma ion, yea o es ablishmen , sales in o -
ma ion, and cos in o ma ion, which p o ides de ailed da a
o ou s udy o mic o-en e p ises. The Chinese En e p ise
Pollu ion Da abase con ains de ailed da a on pollu ion emis-
sion indica o s o mic o-en e p ises, including exhaus gas,
was ewa e , indus ial dus , and o he pollu ion indica o s.
The en e p ise inno a ion da abase con ains he inno a ion
indica o s o mic o-en e p ises, including he numbe o
pa en s g an ed and he numbe o pa en applica ions.
4.2 Model o Measu emen
In his s udy, he DID me hod is adop ed o s udy he
impac o he pollu an discha ge ee implemen ed in
2003 on en e p ise inno a ions, which is conduci e o alle-
ia ing he possible endogenei y and missing a iable bias.
Because he pollu an discha ge ee in 2003 was olled ou
all a once wi hou a pilo , we could no dis inguish he
ea men g oup and he con ol g oup acco ding o he
o dina y DID me hod. To sol e his p oblem, we g ouped
he en e p ises acco ding o he median emission in ensi y
o pollu an s and hen dis inguished he ea men g oup
and he con ol g oup. Fo his pu pose, we es ablished he
DID model o in ensi y as ollows:
=+ × + ++++αα γX δσθεlnno a ea pos .
ic ic i c i 01
Specifically, lnno a
ic
ep esen s he inno a ion le el
o he i h en e p ise o ci y cin he yea . ea is he
di ided in ensi y based on he median amoun o pollu ion
discha ge, i.e., hose ha a e g ea e han o equal o he
median amoun belonged o he ea men g oup, and
hose ha a e less han he median amoun belonged o
he con ol g oup. pos is he i ual g oup when he pollu-
ion discha ge ee is p omulga ed, i.e., hose ha a e
g ea e han o equal o 2003 we e ma ked as 1, and hose
ha a e less han 2003 we e ma ked as 0. X
ic
ep esen s a
se ies o con ol a iables a he ci y le el and he en e -
p ise le el. δ
i
ep esen s he fixed effec s o indi idual
en e p ises. σ
c
ep esen s he fixed effec s a he ci y le el.
θ
ep esen s he fixed effec s a he con ol ime le el. ε
i
is
he andom dis u bance e m. α
1
is he eg ession coeffi-
cien o DID ha we we e in e es ed in.
4.3 Explained Va iable
In his s udy, he loga i hm o he numbe o pa en s and he
loga i hm o R&D expendi u e we e used as he explained
a iables. Specifically, he loga i hm o he numbe o
pa en s was used as he esul o baseline eg ession,
and he loga i hm o R&D expendi u e was used as he
con ol index o obus ness es .
4.4 Co e Explana o y Va iable
In his s udy, he pollu ion emission in ensi y o en e -
p ises was es ablished as he co e explana o y a iable.
A e he s anda diza ion o was ewa e , was e gas, solid
pollu an s, and sul u dioxide, he o e all pollu ion emis-
sion index was syn hesized by weigh ing. Then, he da a o
pollu ion emission indexes we e a anged, i.e., hose ha
a e g ea e han o equal o he median amoun belonged
o he ea men g oup, and hose ha a e less han he
median amoun belonged o he con ol g oup. The ele-
an a iable names and s a is ical desc ip ions a e shown
in Table 1.
5 Main Resul s
5.1 Baseline Resul s
This s udy adop ed he Chinese indus ial en e p ise da a-
base, pollu ion da abase, and en e p ise inno a ion da a
om 2000 o 2008, including 32,035 obse ed alues o
iden i y he DID model. The es ima ed esul s a e shown
in Table 2. Specifically, he explained a iable is he
6Yuxing Wang e al.
inno a ion le el o he en e p ise, and (1) is he loga i hm
o R&D expense as he eg ession esul o he explained
a iable, and (2) is he eg ession esul o con ol a i-
ables a he en e p ise le el added on he basis o (1),
and (3) is he eg ession esul o pa en loga i hm as he
explained a iable.
Resul s o he basic eg ession showed ha he coeffi-
cien s we e significan ly posi i e, and all passed he 1%
le el es . In addi ion, when con olling a iables a he
en e p ise le el such as asse -liabili y a io, en e p ise
size, en e p ise li e, and en e p ise p ofi a e we e added,
he e was no significan change in he esul s, and he
coefficien was s ill significan ly posi i e, indica ing he
obus ness o he conclusion. Collec i ely, we concluded
ha he en i onmen al egula ion o pollu an discha ge
ees in oduced by he Chinese go e nmen in 2003 had
significan ly imp o ed he inno a ion le el o en e p ises.
5.2 Dynamic Effec and Pa allel T end Tes
The p emise o applying he DID me hod is ha he ea -
men g oup and he con ol g oup ha e he same de elop-
men end be o e he policy shock. This s udy used he
E en S udy me hod epo ed by Jacobson e al. (1993) o
e i y he pa allel end o he DID model and u he dis-
cussed he dynamic effec s o policy shocks on his basis.
The specific es ima ion is as ollows:
∑=+ × + +++
+
≥−
αβ DγX δσθ
ε
lnno a ea
.
ic kki kic i c
i
02
3
Table 1: Va iable names and s a is ical desc ip ions
Va iable name Obse a ions Mean S anda d de ia ion Min Max
lny 32,035 0.5963 2.079 0 14.3
lnzl 32,035 0.1949 0.6339 0 7.724
did 32,035 0.29 0.4539 0 1
size 31,995 11.6477 1.498 0 18.96
lnL 27,960 6.185 1.1838 0 11.3122
le 31,995 0.5737 0.2913 −0.2824 9.844
finance 31,947 0.036636 1.649 −287.25 62.428
age 32,004 16.07 30.598 0 2008
lnwage 25,769 2.616 0.6998 −5.2 7.529
sub 26,237 0.0032 0.0628 −0.18 7.59
lnkl 27,909 4.313 1.26 −3.4 10.9
p ofi 31,995 0.1977 27.954 −2.37 5,000
kc 28,405 3.3 449.872 0 75,820
Table 2: Reg ession esul s o basic a iables
Va iable (1) (2) (3) (4)
R&D
expenses
Add
con ol
a iable
Numbe
o pa en s
Add
con ol
a iable
lny lny lnzl lnzl
did 0.506*** 1.172*** 0.089*** 0.112***
(0.049) (0.110) (0.014) (0.019)
size 0.698*** 0.113***
(0.089) (0.016)
lnL 0.075 0.037**
(0.091) (0.016)
le 0.374*** −0.015
(0.134) (0.024)
finance 0.034 0.003
(0.021) (0.004)
age −0.000 −0.000
(0.001) (0.000)
lnwage 0.086* 0.015
(0.047) (0.009)
sub −0.073 0.030*
(0.106) (0.017)
lnkl 0.022 0.006
(0.062) (0.011)
p ofi 0.189* 0.016
(0.113) (0.021)
kc −0.008 −0.003
(0.012) (0.002)
Cons an 0.473*** −8.449*** 0.173*** −1.432***
(0.015) (0.889) (0.004) (0.172)
Obse a ions 30,462 20,145 30,462 20,145
R-squa ed 0.476 0.592 0.669 0.681
No es: *, **, and *** indica e s a is ical significance a he 10, 5, and 1%
le els, espec i ely.
Impac o En i onmen al Regula ion on Technological Inno a ion o En e p ises 7
Specifically, ea
i
is he pollu ion emission o he i h
en e p ise in he yea .
D
k
is he i ual e en ime a i-
able wi h a alue o 0 o 1. When k<0,
D
k
is aken as 1 in
he k h yea be o e he policy impac ; o he wise, i is aken
as 0; when k>0, ake 1 in he k h yea a e he policy
shock occu s, o he wise ake 0; when k=0,
D
k
is aken as 1
in he yea when he policy impac occu s, o he wise, i is
aken as 0. In o de o simpli y he analysis, he case o k≤
−2 is conside ed as k=−2; ha is, he co esponding
D
k
o
he 2 yea s be o e he policy impac is aken as 1; o he -
wise, i is aken as 0. In he eg ession, k=−1 is aken as he
benchma k g oup, and he eg ession coefficien β
k
ep e-
sen s he diffe ence be ween he ea men g oup and he
con ol g oup 1 yea be o e he policy impac .
Figu e 4 shows he es esul s o he pa allel end
om 2001 o 2006. The poin in he g aph ep esen s he
β
k
es ima e, and he do ed line passing h ough he poin
and pe pendicula o he X-axis ep esen s he 95% ho i-
zon al confidence in e al. The X-axis ep esen s he es i-
ma ed alue o β
k
om 2001 o 2006, and he policy
occu ed a he yea 2003. As shown in Figu e 4, he es i-
ma ed alue o β
k
a he yea 2001 and 2002 fluc ua es
a ound 0, and he wid h o he co esponding 95% le el
confidence in e al is wide and c osses 0, and he diffe ence
be ween he ea men g oup and he con ol g oup has no
changed significan ly. Collec i ely, he abo e esul s indi-
ca ed ha he pa allel end es has been passed.
F om 2003 o 2006, he en e p ises in he ea men
g oup and he con ol g oup s a ed o open a gap a e
he p omulga ion o he Regula ions on he Collec ion and
Use o Pollu ion Discha ge Fees, indica ing ha he effec s
we e b ough abou by he impac o he policy. In addi-
ion, Figu e 4 also eflec s he impac o he p omulga ion
o he Regula ions on he Collec ion and Use o Pollu ion
Discha ge Fees in 2003 on he le el o echnological inno-
a ion o en e p ises. Cu en ly, he es ima ed alue o β
k
om 2003 o 2006 a e all significan ly posi i e, indica ing
ha he p omulga ion o he pollu ion cha ge policy has
p omo ed he inno a ion le el o en e p ises.
5.3 Robus ness Tes
Al hough he p e ious pa allel end es and DID esul s
showed ha en i onmen al egula ions ha e significan ly
imp o ed he le el o echnological inno a ion o en e p ises,
i is s ill impossible o comple ely elimina e he endogenous
p oblems caused by measu emen e o s and en e p ise sel -
selec ion. In o de o de e mine he eliabili y o he esea ch
esul s, we conduc ed a se ies o obus ness es s.
5.3.1 Placebo Tes
All he en e p ises in 2003 om he o e all panel da a we e
selec ed wi h andomly selec ed 50% o hem and ma ching
hem wi h he o e all panel da a. The 50% o he en e -
p ises selec ed we e used as he expe imen al g oup, and
he es we e used as he con ol g oup. On his basis, DID
p ocessing was pe o med, and he p ocesses we e epea ed
o 200 imes. The final esul s wi h he esul s o 200
andom p ocesses a e shown in Figu e 5.TheX-axis ep e-
sen s he size o he es ima ed coefficien o he “pseudo
policy dummy a iable,”and he Y-axis ep esen s he size
o he densi y alue and p alue. The cu e is he ke nel
densi y dis ibu ion o he es ima ed coefficien , he do is
he p alue co esponding o he es ima ed coefficien , he
e ical do ed line indica es he eal es ima ed alue (i.e.,
0.112) o he DID model, and he ho izon al do ed line is he
significance le el (i.e., 0.1). The es ima ion coefficien s a e
mos ly concen a ed nea ze o, and mos o he ps a is ics
a e g ea e han 0.1. The ue es ima es o he DID model
belong o ob ious ou lie s, indica ing ha ou eg ession
esul s passed he placebo es .
5.3.2 Robus ness Tes o he Explained Va iable
The fi s me hod is o sh ink he ail o he explained a i-
able. We sh ank he ail o he explained a iable by 1%.
Column (1) is he esul o sh inking he ail o he en e -
p ise’s R&D expense da a, and Column (2) is he esul o
sh inking he numbe o en e p ise pa en s. Resul s showed
ha he eg ession esul s o he explained ail sh inking
ea men we e significan ly posi i e, which we e consis en
Figu e 4: Pa allel end es cha om 2001 o 2006. No es: The solid line
plo s he poin es ima ion coefficien , and he dashed lines deno e he
95% confidence in e al.
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Impac o En i onmen al Regula ion on Technological Inno a ion o En e p ises 15
Appendix A. Va iable Desc ip ions
Table A1: Va iable desc ip ions
Va iable name Da a desc ip ions
lny Loga i hm o esea ch and de elopmen cos s
lnzl Loga i hm o en e p ise pa en s
did Co e a iable o DID model( ea *pos )
size Loga i hm o o al asse s
lnL Loga i hm o he numbe o employees
le To al co po a e liabili ies/ o al co po a e asse s
finance In e es expense/fixed asse s
age Cu en yea minus yea o business opening
lnwage Loga i hm o (To al wages payable/numbe o
employees)
sub Go e nmen subsidies/ o al sales
lnkl Loga i hm o (To al fixed asse s/numbe o
employees)
p ofi To al p ofi / o al co po a e asse s
kc Fixed asse s/G oss indus ial ou pu alue
16 Yuxing Wang e al.
