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A differentiated study of the impact of command and market-based environmental regulation on corporate R&D investments —take China's coal power industry chain as an example

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  • Gao, Jiaming
  • Zhang, Li

Abstract

Environmental regulation is an important means for governments to curb environmental pollution and enhance environmental governance, whereas corporate R&D investment determines long-term firm development and fosters technological innovation. To study the differences in the impact of command and market-based environmental regulation policies on corporate R&D investment, this paper uses data from China's coal firms, electric power firms, and environmental protection firms from 2011 to 2022 as a sample and conducts a differentiation analysis using bioinformatics domain methods. It is concluded that: (1) The Environmental Protection Tax Law (EPTL) and the New Environmental Protection Law (NEPL) complement each other in promoting R&D investment by coal and electric power firms. (2) The implementation of the EPTL not only consolidates the position of the NEPL but also encourages firms to invest in R&D. This is achieved through regulating pollution discharge fee standards, reducing local government intervention, intensifying the enforcement power of the NEPL, and increasing government subsidies for environmental protection initiatives. (3) Compared with the NEPL, the EPTL has a greater impact on the R&D investments of coal and electric power firms and demonstrates better timeliness.

Suggested Citation

  • Gao, Jiaming & Zhang, Li, 2025. "A differentiated study of the impact of command and market-based environmental regulation on corporate R&D investments —take China's coal power industry chain as an example," Energy Policy, Elsevier, vol. 207(C).
    • Handle: RePEc:eee:enepol:v:207:y:2025:i:c:s030142152500343x
    DOI: 10.1016/j.enpol.2025.114836
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    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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