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Does environmental regulation promote the high-quality development of manufacturing? A quasi-natural experiment based on China's carbon emission trading pilot scheme

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  • Wang, Lianghu
  • Wang, Zhao
  • Ma, Yatian

Abstract

While there is an abundant stream of literature focusing on China's market-oriented environmental regulations, there is still a lack of research on the impact of China's carbon emission trading pilot (CETP) scheme on the high-quality development of manufacturing. In order to address this research gap, this paper employs the entropy TOPSIS method to quantitatively measure the development level of manufacturing activities in 30 provinces of China from 2011 to 2016. Then, the propensity score matching and difference in difference (PSM-DID) approach is used to empirically test the policy effect of CETP. Results show that the high-quality development level of China's manufacturing is relatively low. While CETP has significantly improved the high-quality development level of the manufacturing industry, the policy effect lags behind. Moreover, technological innovation plays an important role in the process of CETP, affecting high-quality development of manufacturing. In response to the above conclusions, this paper puts forward some policy implications.

Suggested Citation

  • Wang, Lianghu & Wang, Zhao & Ma, Yatian, 2022. "Does environmental regulation promote the high-quality development of manufacturing? A quasi-natural experiment based on China's carbon emission trading pilot scheme," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:soceps:v:81:y:2022:i:c:s0038012121002081
    DOI: 10.1016/j.seps.2021.101216
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    Cited by:

    1. Che, Shuai & Wang, Jun & Chen, Honghang, 2023. "Can China's decentralized energy governance reduce carbon emissions? Evidence from new energy demonstration cities," Energy, Elsevier, vol. 284(C).

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