TITLE:
Does Environmental Regulation Promote Green Technology Innovation in Chinese Manufacturing?
AUTHORS:
Jingjing Liu, Ming Zhao
KEYWORDS:
Environmental Regulation, Green Technology Innovation, Green Product Innovation, Green Process Innovation
JOURNAL NAME:
Open Access Library Journal,
Vol.7 No.7,
July
7,
2020
ABSTRACT: The Porter Hypothesis states that environmental regulation promotes technological innovation among enterprises, thereby supporting economic growth. However, whether the hypothesis is valid in China remains to be tested. To assess this, we construct an environmental regulation panel model to assess the impact of regulation on green technology innovation, examining data from 27 manufacturing industries in China from 2006 to 2015. Based on extant research results on environmental regulation and technological innovation in China and abroad, we divide green technology innovation into green product innovation and green process innovation as the dependent variables, using environmental regulation as the independent variable and total industry profits and innovative human resources as the control variables. Our results show that at this stage, for the 27 industries, the implementation of strict environmental regulations has inhibited both green process innovation and green product innovation. The result verifies that the Porter Hypothesis is not valid in the current Chinese manufacturing environment.