IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v79y2023icp917-928.html
   My bibliography  Save this article

Impact of environmental policy on the innovation of SMEs: Chinese evidence

Author

Listed:
  • Luo, Wenqi
  • Ma, Yong

Abstract

As environmental concerns continue to grow worldwide, the role of environmental policy in promoting sustainable development has become increasingly important. This study examines the impact of environmental policy on the innovation of small and medium-sized enterprises (SMEs) in China, a country where environmental regulation has been rapidly expanding in recent years. The analysis employs a regression model that controls for various firm-level and environmental factors that may affect innovation. A loan guarantee may boost an SME’s chances of acquiring borrowed funds, the number of loans obtained, expenses, capital equipment expenditures, and TFP by 2%, 17.4%, 7.6%, 6.16%, and 5.26%, respectively. Furthermore, the influence of information networks on performance is examined. Environmental policy and open innovation activity, opposite transfer, investor interactions, and SMEs’ success are all examined, with a focus on Chinese SMEs. The findings suggest that policymakers should consider designing more targeted and flexible environmental policies that provide incentives for SMEs to innovate and adopt sustainable practices, while minimizing potential negative impacts on their competitiveness and financial performance.

Suggested Citation

  • Luo, Wenqi & Ma, Yong, 2023. "Impact of environmental policy on the innovation of SMEs: Chinese evidence," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 917-928.
    • Handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:917-928
    DOI: 10.1016/j.eap.2023.06.037
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592623001595
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2023.06.037?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Dongyang & Mohsin, Muhammad & Rasheed, Abdul Khaliq & Chang, Youngho & Taghizadeh-Hesary, Farhad, 2021. "Public spending and green economic growth in BRI region: Mediating role of green finance," Energy Policy, Elsevier, vol. 153(C).
    2. Xiuzhen, Xie & Zheng, Wenxiu & Umair, Muhammad, 2022. "Testing the fluctuations of oil resource price volatility: A hurdle for economic recovery," Resources Policy, Elsevier, vol. 79(C).
    3. Naoyuki Yoshino & Ehsan Rasoulinezhad & Farhad Taghizadeh-Hesary, 2021. "Economic Impacts of Carbon Tax in a General Equilibrium Framework: Empirical Study of Japan," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 23(01n02), pages 1-25, June.
    4. Taghizadeh-Hesary, Farhad & Rasoulinezhad, Ehsan & Shahbaz, Muhammad & Vinh Vo, Xuan, 2021. "How energy transition and power consumption are related in Asian economies with different income levels?," Energy, Elsevier, vol. 237(C).
    5. Quang-Thanh Ngo & Hoa Anh Tran & Hai Thi Thanh Tran, 2021. "The impact of green finance and Covid-19 on economic development: capital formation and educational expenditure of ASEAN economies," China Finance Review International, Emerald Group Publishing Limited, vol. 12(2), pages 261-279, October.
    6. Chang, Lei & Gan, Xiaojun & Mohsin, Muhammad, 2022. "Studying corporate liquidity and regulatory responses for economic recovery in COVID-19 crises," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 211-225.
    7. Li, ChangZheng & Umair, Muhammad, 2023. "Does green finance development goals affects renewable energy in China," Renewable Energy, Elsevier, vol. 203(C), pages 898-905.
    8. Mostafa Emrul Wahid & Arifin Sultana & Aditi Chakrovorty, 2020. "Belt And Road Initiative Of China: Perspective Of Bangladesh," Noble International Journal of Social Sciences Research, Noble Academic Publsiher, vol. 5(6), pages 95-101, June.
    9. Chang, Lei & Moldir, Mukan & Zhang, Yuan & Nazar, Raima, 2023. "Asymmetric impact of green bonds on energy efficiency: Fresh evidence from quantile estimation," Utilities Policy, Elsevier, vol. 80(C).
    10. Xiaoguang Zhou & Yadi Cui, 2019. "Green Bonds, Corporate Performance, and Corporate Social Responsibility," Sustainability, MDPI, vol. 11(23), pages 1-27, December.
    11. Liu, Fang & Umair, Muhammad & Gao, Junjun, 2023. "Assessing oil price volatility co-movement with stock market volatility through quantile regression approach," Resources Policy, Elsevier, vol. 81(C).
    12. Pasquale Marcello Falcone, 2020. "Environmental regulation and green investments: the role of green finance," International Journal of Green Economics, Inderscience Enterprises Ltd, vol. 14(2), pages 159-173.
    13. Fang, Wei & Liu, Zhen & Surya Putra, Ahmad Romadhoni, 2022. "Role of research and development in green economic growth through renewable energy development: Empirical evidence from South Asia," Renewable Energy, Elsevier, vol. 194(C), pages 1142-1152.
    14. Chang, Lei & Taghizadeh-Hesary, Farhad & Chen, Huangen & Mohsin, Muhammad, 2022. "Do green bonds have environmental benefits?," Energy Economics, Elsevier, vol. 115(C).
    15. Pan, Weihua & Cao, Hang & Liu, Ying, 2023. "“Green” innovation, privacy regulation and environmental policy," Renewable Energy, Elsevier, vol. 203(C), pages 245-254.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Telfah, Sadeq & Chau, Ka Yin & Tran, Trung Kien & Bui, Anh Tuan & Tai, Nguyen Tan & Phan, Thi Thu Hien, 2023. "Role of financial markets and natural resource utilization in green economic recovery: Evidence from selected developing economies," Resources Policy, Elsevier, vol. 83(C).
    2. Liang, Shuai & Wang, Peng & Jia, Cunlu & Zhu, Jialan, 2023. "Studying green financing, factor allocation efficiency, and regional productivity growth in renewable energy industries," Renewable Energy, Elsevier, vol. 214(C), pages 130-139.
    3. Zhang, Ziwei & Fu, Hu & Xie, Shiqi & Cifuentes-Faura, Javier & Urinov, Bobur, 2023. "Role of green finance and regional environmental efficiency in China," Renewable Energy, Elsevier, vol. 214(C), pages 407-415.
    4. Chen, Wei & Zou, Wandan & Zhong, Kaiyang & Aliyeva, Alina, 2023. "Machine learning assessment under the development of green technology innovation: A perspective of energy transition," Renewable Energy, Elsevier, vol. 214(C), pages 65-73.
    5. Fang, Ying & Fan, Ying & Haroon, Muhammad & Dilanchiev, Azer, 2023. "Exploring the relationship between global economic policy and volatility of crude futures: A two-factor GARCH-MIDAS analysis," Resources Policy, Elsevier, vol. 85(PA).
    6. Zuo, Yun & Zhi, Kangquan & Pei, Yingshun & Zhuang, Wencan & Chen, Yanhua, 2023. "Combining the role of natural resources development and trade openness on economic growth: New evidence from linear and asymmetric analysis," Resources Policy, Elsevier, vol. 83(C).
    7. Chang, Lei & Taghizadeh-Hesary, Farhad & Mohsin, Muhammad, 2023. "Role of artificial intelligence on green economic development: Joint determinates of natural resources and green total factor productivity," Resources Policy, Elsevier, vol. 82(C).
    8. Xu, Zilin & Mohsin, Muhammad & Ullah, Kaleem & Ma, Xiaoyu, 2023. "Using econometric and machine learning models to forecast crude oil prices: Insights from economic history," Resources Policy, Elsevier, vol. 83(C).
    9. Li, Yali & Pang, Dezhi & Cifuentes-Faura, Javier, 2023. "Time-Varying linkages among financial development, natural resources utility, and globalization for economic recovery in China," Resources Policy, Elsevier, vol. 82(C).
    10. Cao, Feifei, 2023. "Digital financial innovation and renewable electrification: A step toward zero carbon nexus," Renewable Energy, Elsevier, vol. 215(C).
    11. Yu, Mengyan & Umair, Muhammad & Oskenbayev, Yessengali & Karabayeva, Zhаnsaya, 2023. "Exploring the nexus between monetary uncertainty and volatility in global crude oil: A contemporary approach of regime-switching," Resources Policy, Elsevier, vol. 85(PB).
    12. Sun, Gebing & Li, Guozhi & Dilanchiev, Azer & Kazimova, Asli, 2023. "Promotion of green financing: Role of renewable energy and energy transition in China," Renewable Energy, Elsevier, vol. 210(C), pages 769-775.
    13. Ding, Xiuying & Liu, Xuemei, 2023. "Renewable energy development and transportation infrastructure matters for green economic growth? Empirical evidence from China," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 634-646.
    14. Kuang, Hewu & Liang, Yiyan & Zhao, Wenjia & Cai, Jiahong, 2023. "Impact of natural resources and technology on economic development and sustainable environment – Analysis of resources-energy-growth-environment linkages in BRICS," Resources Policy, Elsevier, vol. 85(PB).
    15. Chen, Haibo, 2023. "Coupling high natural resources and carbon emission efficiency on economic growth in China," Resources Policy, Elsevier, vol. 85(PB).
    16. Gao, Ming, 2023. "Role of financial inclusion and natural resources for green economic recovery in developing economies," Resources Policy, Elsevier, vol. 83(C).
    17. Dai, Li & Xiong, Yuyu, 2023. "Does the green finance development and renewable energy affect the economic recovery in Asian economies," Renewable Energy, Elsevier, vol. 216(C).
    18. Li, Junji & Wang, Rui & Aizhan, Duisebayeva & Karimzade, Mehriban, 2023. "Assessing the impacts of Covid-19 on stock exchange, gold prices, and financial markets: Fresh evidences from econometric analysis," Resources Policy, Elsevier, vol. 83(C).
    19. Zhang, Rongxin & Aljumah, Ahmad Ibrahim & Ghardallou, Wafa & Li, Zeyun & Li, Jinhua & Cifuentes-Faura, Javier, 2023. "How economic development promotes the sustainability targets? Role of natural resources utilization," Resources Policy, Elsevier, vol. 85(PA).
    20. Qi, Haozhi & Huang, Xucheng & Sheeraz, Muhammad, 2023. "Green financing for renewable energy development: Driving the attainment of zero-emission targets," Renewable Energy, Elsevier, vol. 213(C), pages 30-37.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:79:y:2023:i:c:p:917-928. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.