Impact of Environmental Regulation on Efficiency of Green Innovation in China

Abstract

The implementation of a reasonable and effective environmental regulation policy can compensate for the dual externalities of green technology innovation and improve green innovation efficiency. Therefore, environmental regulation policy has gradually become an effective means of solving ecological environment problems and achieving green industrial transformation. This paper measures the green innovation efficiency of 30 provinces in China from 2009 to 2019 using the SBM (slacks-based measure) of super-efficiency based on the undesirable output. The dynamic panel regression model is established to explore the impact of different environmental regulations on green innovation efficiency and regional differences. The results reveal that the green innovation efficiency of the 30 provinces shows a fluctuating upward trend, but that differences among provinces are relatively significant. There is a nonlinear relationship between environmental regulation and green innovation efficiency. The impact of command-control and market incentive environmental regulations on green innovation efficiency shows inverted N-shaped and U-shaped patterns, respectively. In different regions, the impact of environmental regulation on green innovation efficiency is also different. In order to ensure that environmental regulation promotes green innovation efficiency, some recommendations are proposed for the government, enterprises, and three regions, respectively.

Keywords

• environmental regulation
• green innovation efficiency
• SBM of super-efficiency
• system GMM estimation