Impact of subsidies on innovations of environmental protection and circular economy in China

Factor allocation efficiency of environmental protection industry in China-Based on the perspective of micro enterprises

The Environmental Protection Industry (EPI) has expanded tremendously in response to rising environmental awareness and governmental assistance. EPI development has been hampered by the disordered and unbalanced allocation of production factors caused by the complex and diverse industry mix. In this study, a micro perspective is adopted to dissect the EPI into three departments: technology, manufacturing, and management. A measuring model for determining the misallocation of factors in the EPI is constructed using a three-department Cobb-Douglas production function. The model assesses the effectiveness of factor allocation in China's national and regional EPI while taking into account provincial industrial structures. The findings demonstrate disparate performances between various factors and departments and highlight noteworthy variances in the effectiveness of factor allocation within China's EPI. In particular, capital misallocation is far worse than labor misallocation, with manufacturing misallocation being noticeably worse than other departments. The excessive concentration of factors within the manufacturing department and the severe lack of inputs in the other two departments are mostly to blame for Central and Northwest China's low factor allocation efficiency. Additionally, capital tends to cluster inside the manufacturing department, while labor tends to move toward dominant departments. Finally, relevant policy suggestions are made based on the empirical findings.

Influences of the ongoing digital transformation of the Chinese Economy on innovation of sustainable green technologies

Green technology innovation (GI) is a key factor in reconciling environmental protection with sustainable economic development. Routinely, GI in private companies have been delayed due to suspicious of pitfalls investments, which result in low return rates. Nevertheless, the digital transformation of Nations' Economies (DE) might be sustainably sound in terms of natural resources demands and environmental pollution. Energy Conservation and Environmental Protection Enterprises (ECEPEs) database was analyzed from 2011 to 2019 at the municipality level to measure the effect and influence of DE on GI in Chinese ECEPEs. The results suggest that DE has a significant positive influence on GI of ECEPEs. Moreover, the influencing mechanism statistical tests reveal that DE can promote GI of ECEPEs by improving internal controls and financing opportunities. Heterogeneous statistical analysis, however, indicates that the promotion of DE on GI might be constrained over the country. In general, DE can promote both high- and low-quality GI but preferably the latter.

What's stopping the waste-treatment industry from adopting emerging circular technologies? An agent-based model revealing drivers and barriers

Many new circular economy technologies are gaining momentum, yet research on the complexity of adoption decisions driven by uncertainties, both at technology and ecosystem level, is lacking. In the present study, an agent-based model was developed to study factors that influence the adoption of emerging circular technologies. The case of the waste treatment industry was chosen, specifically its (non-) adoption of the so-called "Volatile Fatty Acid Platform", a circular economy technology that facilitates both the valorization of organic waste into high-end products as well as their sale on global markets. Model results show adoption rates under 60% due to effects of subsidies, market growth, technological uncertainty and social pressure. Furthermore, the conditions were revealed under which certain parameters have the most effect. An agent-based model enabled use of a systemic approach to reveal the mechanisms of circular emerging technology innovation that are most relevant for researchers and waste treatment stakeholders.

Can Enterprises in China Achieve Sustainable Development through Green Investment?

Enterprises have emerged as primary actors in environmental protection owing to the increasingly severe global energy crisis and environmental pollution. Companies can reduce operational costs, achieve environmental social responsibility, and enhance their green image by increasing their green investments. Simultaneously, companies can gain support from investors, governments, and other stakeholders for improving their sustainable development. This study uses fixed-effects regression models to analyze the impact of green investment on corporate sustainability in Chinese listed companies for the period from 2010 to 2020. It also investigates the moderating effects of government environmental subsidies, investor attention, and executives' overseas experience on the relationship between green investment and corporate sustainability. The data used in this study were not only obtained from the China Stock Market & Accounting Research (CSMAR) database but also collected manually from the annual reports and social responsibility reports of listed companies using web crawler technology. And the robustness test was conducted by removing the epidemic year and replacing the range of independent variables and 2SLs. This study uses Stata 17.0 to filter and process the data. The results show that green investment can significantly improve the sustainability of enterprises; besides, government subsidies, investors' attention, and executives' overseas experience all play a positive role in moderating the positive effect of green investment on the sustainable development of enterprises. Further analysis of this study finds that the moderating effect is more significant in non-state-owned enterprises and highly polluting enterprises. This study contributes to broadening the theory related to the green development of enterprises and environmental governance and provides theoretical support for enterprises to make green investment decisions and green transformations.

How to Achieve Carbon Neutrality: From the Perspective of Innovative City Pilot Policy in China

The innovative city pilot policy is a new engine to accelerate the social development of China, which is an important support feature for realizing sustainable economic development. Using the city pilot policy issued by the Chinese government in 2008 as a quasi-natural experiment and the method of multi-period difference-in-differences (DID) model, we explore the effect of the policy on regional carbon emission efficiency. The research shows that the innovative city pilot policy could lead a significant promotion of the carbon emission efficiency of cities, which shows the characteristics of dynamic sustainability, that is, the policy effect continues to increase over time. Mechanism analysis reveals that the innovative city pilot policy mainly drives the improvement of urban carbon emission efficiency through improving the green technology innovation level of pilot cities, promoting the upgrading of regional industrial structure and increasing government investment in science and technology. In addition, the innovative city pilot policy has a spatial spillover effect on urban carbon emission efficiency, that is, the innovative city pilot policy not only promotes the local carbon emission efficiency, but also improves the carbon efficiency of neighboring areas.

The Efficiency of Green Technology Innovation and Its Influencing Factors in Wastewater Treatment Companies

To achieve the harmonious development of economic growth and the environment, nations must pay more attention to wastewater treatment and boost efficiency using green technology. This study applies the Malmquist-DEA model to assess the efficiency of green technology innovation in 19 Chinese wastewater treatment companies between 2017 and 2020. In addition, focus is placed on the core wastewater treatment technology of the companies with excellent performance, indicating how wastewater treatment companies may improve their green technology. The results of the study indicate that, first, the overall effectiveness of green technology innovation in companies follows a rising and then decreasing trend. In 2020, wastewater treatment companies’ green technology innovation efficiency was around 17.4 percent lower than in 2017. Improving technical progress is the key to boosting the total factor productivity of wastewater treatment companies. Second, based on the Tobit regression, the shareholding ratio of companies has a positive influence on the technical efficiency of companies. Therefore, China should increase innovation capacity and productivity, adopt current sewage treatment technology from overseas, and thus gradually achieve clean sewage utilization and ecological environment management.

Improving the Innovative Performance of Renewable Energy Enterprises in China: Effects of Subsidy Policy and Intellectual Property Legislation

Energy efficiency and emissions reductions are effective initiatives to address climate change and energy security. China has increased government subsidies and intellectual property protection (IPP) intensity to promote technological innovation in the renewable energy sector. This paper selects samples of geothermal, wind, and solar energy companies and examines whether the two initiatives mentioned above can improve company innovation, and assesses their action pathways. The results reveal that: (i) government subsidies can directly facilitate renewable energy enterprises’ innovative performance, and research and development (R&D) input served as a medium; and (ii) the intensity of IPP moderation needed for geothermal and solar enterprises to utilize the government subsidy to enhance innovation. The government should consider the differences of different sub-sectors of renewable energy when increasing subsidies. Better laws and policies are needed to strengthen the protection of intellectual property rights and stimulate innovation in renewable energy enterprises.

The Effect of R&D Input on Operating Income of Chinese Wastewater Treatment Companies—With Patent Performance as a Mediating Variable

The Chinese government is actively promoting green and low-carbon transformation for economic and social development, especially in the wastewater treatment industry. This article uses regression analysis to study the impact of company R&D input on patent performance and company operating income for different regulatory environments and regions. Companies in the wastewater treatment industries of the Shanghai and Shenzhen stock exchanges from 2013 to 2020 are selected as research samples. The results show that there is a partial mediating effect of patent performance between company R&D input and company operating income; the stimulative effect of company R&D input is strongest in a high external-high internal environment; this stimulative effect is also more significant in the three strategic regions when compared with other regions. The findings suggest that company R&D input can promote company operating income. Thus, wastewater treatment enterprises should establish complete R&D systems to improve their innovative output capabilities. Enterprises in more developed regions should play a leading role in undertaking technological innovation. Furthermore, the government should formulate policies to improve the capacity of companies to conduct wastewater treatment and continue down the road of green development.

How to Restrain Regulatory Capture and Promote Green Innovation in China. An Analysis Based on Evolutionary Game Theory

In response to severe environmental challenges, green innovation (GI) has been thoroughly considered by various governments. Although China has promulgated many environmental policies to promote environmental governance, regulatory capture and the lack of independent external supervisors lead to a challenging future. This study employs an evolutionary game method to explore how the policy burden and media affect decision-making between local governments and manufacturing enterprises. On this basis, the simulation method is used to examine critical factors that affect regulatory capture and GI. The results show that the policy burden is the main factor that causes regulatory capture. When the policy burden exceeds a certain threshold, it will cause regulatory capture and hinder GI. Moreover, media, as an external supervisor, can restrain regulatory capture and promote GI significantly. Specifically, when the capacity of media supervision is high enough, due to the positive role of the media, it will inhibit the negative effects of policy burdens. Finally, combined with the different development stages of China’s green industry, the corresponding policy recommendations are given. These results extend the research of regulatory capture and provide a reference for governments to promote environmental governance in practice.