Environmental benefits of innovation policy: China's national independent innovation demonstration zone policy and haze control

Quantity and quality: The impact of environmental, social, and governance (ESG) performance on corporate green innovation

Despite increasing attention to the economic consequences of environmental, social, and governance (ESG) performance, its impact on the quantity and quality of corporate green innovation (GI) remains underexplored. This study aims to reveal the impact and underlying mechanisms of ESG performance on corporate GI using a panel dataset of Chinese-listed enterprises. Our results show that ESG performance increases the quantity and quality of corporate GI by 2.72% and 3.20%, respectively. These significant positive effects are consistent across three ESG sub-ratings and a series of robustness tests, such as the instrumental variable (IV) test based on Confucian culture intensity. Mechanism analysis reveals that ESG performance positively affects corporate GI through the resource effect, governance effect, and innovation effect. Additionally, the GI impact of ESG performance is more pronounced in large, young, growing, and mature enterprises, enterprises in clean and low-carbon industries, and those located in key environmental protection (KEP) and two control zones (TCZ) cities. Our evidence provides insights into the informal drivers of corporate GI and the micro-GI effectiveness of ESG performance in emerging markets like China.

Bridging the gap: Building environmental, social and governance capabilities in small and medium logistics companies

Nowadays, the popularity of environmental, social, and governance (ESG) performance measurement has dramatically increased, particularly to listed companies, for supporting various investment decisions. Companies with high ESG scores imply that their ongoing business development is recognised to be economically, socially, and environmentally sustainable. From the current ESG measurement practice, the measurement frameworks are built on rating schemes, such as KLD and ASSET4, so as to derive the ESG scores for listed companies. However, such existing measurement frameworks are difficult to be implemented in small and medium enterprises (SMEs) with unstructured and non-standardised business data, especially in logistics and supply chain management (LSCM) practice. In addition, it is inevitable for listed companies to work with SMEs, for example logistics service providers, but they need a systematic framework to source the responsible SMEs to maintain the ESG performance. To address the above industrial pain-points, this study proposes an ESG development prioritisation and performance measurement framework (ESG-DPPMF) by means of the Bayesian best-worst method enabling the group decision-making capability to prioritise the ESG development areas and formulate the performance measurement scheme. Through consolidating the opinions from logistics practitioners, it is found that fair labour practice, reverse logistics and human right in supply chains are the most essential areas to further enhance ESG capabilities in the logistics industry. In addition, the viability of the ESG performance measurement has been validated, and thus the sustainable and human-centric logistics practice can be developed to achieve business sustainability.

Achieving synergy between carbon mitigation and pollution reduction: Does green finance matter?

The synergy between carbon mitigation and pollution reduction (CMPR) serves as the predominate catalyst for facilitating green transformation. Although the Green Finance Polit Policy (GFPP) shares a commitment to green development, its effectiveness in fostering the synergy of CMPR remains uncertain. Hence, we adopted the Difference-In-Difference (DID) model to investigate the effect of GFPP on the synergy between CMPR during 2009-2019. Initially, a composite synergy degree model is employed to assess the synergy between CMPR at the prefectural level. Our empirical findings demonstrate a notable contribution of GFPP in augmenting the synergy between CMPR. Robustness tests using Tobit model, PSM-DID, and placebo tests (temporal and regional) also confirm the stability of the findings. Furthermore, the study identifies three plausible mechanisms, including industry optimization, green innovation, and energy structure, which are likely to impact the aforementioned synergy. Empirical tests provide supportive evidence that substantiates the theoretical validity of these mechanisms, indicating that optimizing industry structure and enhancing the quality of green innovation can amplify the positive impact of green finance. Additionally, the impact of green finance policy in augmenting the synergy between CMPR exhibits greater prominence in central regions, non-resource-based cities, and non-key environmental protection cities. Our study also uncovers an additional finding that green finance has a detrimental effect on the quality of green innovation, thereby impeding the advancement of synergy between CMPR. In summary, our findings offer novel insights into promoting the synergistic relationship between CMPR by means of implementing green finance policy.

Quantity or quality? Regional innovation policy and green technology innovation

As a typical practice of regional innovation policy, national innovation demonstration zones (NIIDZ) plays an important role in empowering green technology innovation. Analyzing the internal logic between NIIDZ and green technology innovation is of great practical significance to enhance China's independent innovation capability and accelerate the ecological civilization construction. Based on the panel data of 280 cities from 2005 to 2020, we use the difference-in-difference model (DID) to evaluate the policy effect of NIIDZ on green technology innovation from the dual perspective of quality and quantity. The results show that NIIDZ effectively contributes to the quantity of green technology innovation (GTI) and the quality of green technology innovation (GTQ), especially GTI. The conclusion is still valid after robustness tests like PSM-DID and eliminating the pilot interference of innovative cities. The test of the intermediary mechanism shows that regional innovation policy can not only directly drive GTI and GTQ but also indirectly promote them through accelerating talent gather, driving industrial clusters, and increasing government financial support. Spatial heterogeneity analysis indicates that the effectiveness of regional innovation policy demonstrates a decreasing trend from east to west, and this positive effect is more significant in cities with a higher level of financial development. Our results provide important policy insights for the Chinese government to further stimulate the effectiveness of green innovation in the NIIDZ, accelerate the construction of an innovative country, and achieve high-quality green economic development.

How does haze pollution affect green technology innovation? A tale of the government economic and environmental target constraints

Numerous studies have revealed that developing green technology innovation is extremely important for minimizing haze pollution. However, limited by serious endogenous problems, research rarely focuses on the effect of haze pollution on green technology innovation. Based on a two-stage sequential game model including both production and government departments, this paper mathematically deduced the effect of haze pollution on green technology innovation. Then China's central heating policy is considered a natural experiment in our study to verify whether haze pollution is the key factor affecting the development of green technology innovation. The result that haze pollution significantly inhibits green technology innovation is confirmed, and this negative impact is mainly concentrated on substantive green technology innovation. Robustness tests have been performed, and the conclusion is still valid. Moreover, we find that government behavior can significantly affect their relationship. Specifically, the government's economic growth target will increase the haze pollution's ability to block the development of green technology innovation. However, if the government has a clear environmental target, their negative relationship will weaken. Based on the findings, targeted policy insights are presented in this paper.

The impact of Water Ecological Civilization City Pilot on urban green innovation: the case of China

As an essential part of ecological civilization, water ecological civilization has significant influence on the green and sustainable development of cities. Under the background of China's Water Ecological Civilization City Pilot (WECCP), based on data from 275 cities in China from 2007 to 2019 by using the difference-in-differences (DID) model, we empirically analyzed the influence of the WECCP establishment on urban green innovation and explored the impact mechanism in depth using a mediating effect model, which aimed to verify whether the "Porter hypothesis" holds true in China. The result indicated that the WECCP had made a remarkable contribution to enhancing urban green innovation in the pilot cities. Further research found that the input mechanism played an important mediating role. In addition, the heterogeneity test indicated that cities in the central region, at low administrative levels, and in the first batch of pilots gained more from the policy establishment. This paper has theoretical implications for understanding the derived innovation benefits of the environmental policy, practical implications for identifying new drivers of urban innovation, and provides related experience for the country to further promote and expand water ecological civilization construction and useful policy inspiration for other developing countries to formulate ecological and environmental policies.

Winning the Blue Sky Defense War: Assessing Air Pollution Prevention and Control Action Based on Synthetic Control Method

Undoubtedly, the rapid development of urbanization and industrialization in China has led to environmental problems, among which air pollution is particularly prominent. In response, the Chinese government has introduced a series of policies, including the Air Pollution Control and Prevention Action Plan (APPA), which is one of the most stringent environmental regulations in history. The scientific evaluation of the implementation of this regulation is important for China to win the battle of blue sky. Therefore, this study uses a synthetic control method to explore the effects of APPA on air pollution (AP) based on data of 30 provinces from 2000 to 2019. The study concludes that (1) APPA significantly reduces AP in the treatment provinces, and subsequent robustness tests validate our findings. However, the persistence of the policy effect is short in some provinces, and the rate of AP reduction slows down or even rebounds in the later stages of the policy. (2) The reduction effect of APPA varies significantly between regions and provinces. (3) The results of mechanism tests show that APPA reduces AP through high-quality economic development, population agglomeration, control of carbon emissions, and optimization of energy structure. Based on the above findings, targeted recommendations are proposed to promote AP control in China and win the blue sky defense war.