Environmental regulation, green innovation, and international competitiveness of manufacturing enterprises in China: From the perspective of heterogeneous regulatory tools

Area of Science:

• Environmental Economics
• Industrial Organization
• International Trade

Background:

• Manufacturing export technological sophistication is crucial for economic growth.
• Heterogeneous environmental regulations present complex impacts on trade and innovation.
• Existing research lacks comparative analysis between regulation types and export sophistication.

Purpose of the Study:

• To investigate the impact of heterogeneous environmental regulations on manufacturing export technological sophistication.
• To compare the effects of command-control, market-incentive, and voluntary-participation regulations.
• To analyze the underlying mechanisms through which regulations influence export sophistication.

Main Methods:

• Utilized combined data from China Patent, Industrial Enterprise, and Customs Import/Export Databases (2004-2010).
• Calculated export technological sophistication based on value-added for enhanced accuracy.
• Employed econometric analysis to assess the U-shaped relationships and differential impacts.

Main Results:

• All three regulation types exhibit a U-shaped impact on export technological sophistication.
• Command-control regulation restrains export sophistication for specific enterprise types.
• Market-incentive and voluntary-participation regulations generally promote export sophistication across various enterprises.

Conclusions:

• Market-incentive and voluntary regulations are more effective in enhancing export technological sophistication and competitiveness.
• Command-control regulations are less effective due to implementation issues and should be discouraged.
• Policy recommendations include improving environmental tax systems and increasing public participation in environmental governance.