IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i10p4550-d1657141.html
   My bibliography  Save this article

The Impact of Environmental Regulations on Technological Progress of the Pesticide Manufacturing Industry in China

Author

Listed:
  • Haixia Yang

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China)

  • Xinxin Zhu

    (College of Economics and Management, Xinjiang Agricultural University, Urumqi 830052, China)

  • Chao Chen

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China)

Abstract

The Chinese government has been continuously strengthening environmental regulations. to promote the reduction in pesticide use. However, the issue of excessive pesticide use remains unresolved. Technological progress of the pesticide manufacturing industry plays a critical role in reducing pesticide intensity and is a key objective of environmental regulations for pesticides. This study examines the impact of China’s environmental regulations on technological progress of the pesticide manufacturing industry by using panel data from 30 provinces between 2004 and 2020 and constructing command-and-control and market-incentive environmental regulations. Empirical results show that environmental regulations have significantly promoted technological progress of the pesticide manufacturing industry, with market-incentive environmental regulations proving more effective than command-and-control environmental regulations. Regional analysis reveals that the eastern and western regions are consistent with the national results, while the central region shows heterogeneity. In the eastern and western regions, environmental regulations have fostered technological progress, generating an “innovation compensation effect”. However, the central region exhibits a dual effect. On one hand, environmental regulations have stimulated research in pesticide technologies; on the other hand, they have squeezed out investment in high-quality and innovative technologies, thereby hindering technological progress to some extent. Consequently, the government should enhance environmental supervision, revise environmental protection laws, and increase investments and subsidies for pesticide enterprises to foster technological innovation. Moreover, the formulation and implementation of environmental regulations should account for regional disparities.

Suggested Citation

  • Haixia Yang & Xinxin Zhu & Chao Chen, 2025. "The Impact of Environmental Regulations on Technological Progress of the Pesticide Manufacturing Industry in China," Sustainability, MDPI, vol. 17(10), pages 1-22, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:10:p:4550-:d:1657141
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/10/4550/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/10/4550/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xepapadeas, Anastasios & de Zeeuw, Aart, 1999. "Environmental Policy and Competitiveness: The Porter Hypothesis and the Composition of Capital," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 165-182, March.
    2. Gray, Wayne B. & Shadbegian, Ronald J., 2003. "Plant vintage, technology, and environmental regulation," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 384-402, November.
    3. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    4. Claire Brunel & Arik Levinson, 2016. "Measuring the Stringency of Environmental Regulations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(1), pages 47-67.
    5. Ruttan, Vernon W, 1997. "Induced Innovation, Evolutionary Theory and Path Dependence:," Economic Journal, Royal Economic Society, vol. 107(444), pages 1520-1529, September.
    6. Kang Pan & Feng He, 2022. "Does Public Environmental Attention Improve Green Investment Efficiency?—Based on the Perspective of Environmental Regulation and Environmental Responsibility," Sustainability, MDPI, vol. 14(19), pages 1-20, October.
    7. Viscusi, W Kip, 1983. "Frameworks for Analyzing the Effects of Risk and Environmental Regulations on Productivity," American Economic Review, American Economic Association, vol. 73(4), pages 793-801, September.
    8. Mo Du & Shanglei Chai & Shu Li & Zejing Sun, 2022. "How Environmental Regulation Affects Green Investment of Heavily Polluting Enterprises: Evidence from Steel and Chemical Industries in China," Sustainability, MDPI, vol. 14(19), pages 1-14, September.
    9. Rui Zhu & Mengting Liu & Liyu Long & Congjia Huo, 2022. "Environmental Regulation, Political Connections, and Corporate Green Investment," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    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. Johan Brolund & Robert Lundmark, 2017. "Effect of Environmental Regulation Stringency on the Pulp and Paper Industry," Sustainability, MDPI, vol. 9(12), pages 1-16, December.
    2. Nusrate Aziz & Belayet Hossain & Laura Lamb, 2022. "Does green policy pay dividends?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 147-172, April.
    3. Dietrich Earnhart & Dylan G. Rassier, 2016. "“Effective regulatory stringency” and firms’ profitability: the effects of effluent limits and government monitoring," Journal of Regulatory Economics, Springer, vol. 50(2), pages 111-145, October.
    4. Tilmann Rave & Ursula Triebswetter, 2006. "Economic impacts of environmental regulations," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 30.
    5. Rassier, Dylan G. & Earnhart, Dietrich, 2015. "Effects of environmental regulation on actual and expected profitability," Ecological Economics, Elsevier, vol. 112(C), pages 129-140.
    6. Jean Pierre Huiban & Antonio Musolesi, 2012. "Augmenting the production function with knowledge capital to test the Porter hypothesis: the case of French food industries," Working Papers hal-02804599, HAL.
    7. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    8. Earnhart, Dietrich & Germeshausen, Robert & von Graevenitz, Kathrine, 2022. "Effects of information-based regulation on financial outcomes: Evidence from the European Union's public emission registry," ZEW Discussion Papers 22-015, ZEW - Leibniz Centre for European Economic Research.
    9. Anabel Zárate-Marco & Jaime Vallés-Giménez, 2015. "Environmental tax and productivity in a decentralized context: new findings on the Porter hypothesis," European Journal of Law and Economics, Springer, vol. 40(2), pages 313-339, October.
    10. Albrizio, Silvia & Kozluk, Tomasz & Zipperer, Vera, 2017. "Environmental policies and productivity growth: Evidence across industries and firms," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 209-226.
    11. Brännlund, Runar & Lundgren, Tommy, 2008. "Environmental policy and profitability - Evidence from Swedish industry," Umeå Economic Studies 750, Umeå University, Department of Economics.
    12. Nikos Chatzistamoulou & George Diagourtas & Kostas Kounetas, 2017. "Do pollution abatement expenditures lead to higher productivity growth? Evidence from Greek manufacturing industries," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(1), pages 15-34, January.
    13. Ambec, Stefan & Barla, Philippe, 2005. "Can Environmental Regulations be Good for Business? an Assessment of the Porter Hypothesis," Cahiers de recherche 0505, Université Laval - Département d'économique.
    14. Pal, Kalyani & Mukhopadhyay, Jyoti Prasad & Bhagawan, Praveen, 2024. "Does cap-and-trade scheme impact energy efficiency and firm value? Empirical evidence from India," Energy Economics, Elsevier, vol. 134(C).
    15. Chang, Juin-Jen & Huang, Chien-Yu & Wong, Chun Yee & Yang, Yibai, 2023. "Environmental regulation stringency and allocation between R&D and physical capital: A two-engine growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 733-753.
    16. Chiara Franco & Giovanni Marin, 2017. "The Effect of Within-Sector, Upstream and Downstream Environmental Taxes on Innovation and Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 261-291, February.
    17. Hille, Erik & Althammer, Wilhelm & Diederich, Henning, 2020. "Environmental regulation and innovation in renewable energy technologies: Does the policy instrument matter?," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    18. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    19. Francesco Nicolli & Francesco Vona & Lionel Nesta, 2012. "Determinants of Renewable Energy Innovation: Environmental Policies vs. Market Regulation," Working Papers 201204, University of Ferrara, Department of Economics.
    20. Badunenko, Oleg & Galeotti, Marzio & Hunt, Lester C., 2021. "Better to grow or better to improve? Measuring environmental efficiency in OECD countries with a Stochastic Environmental Kuznets Frontier," FEEM Working Papers 316226, Fondazione Eni Enrico Mattei (FEEM).

    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:gam:jsusta:v:17:y:2025:i:10:p:4550-:d:1657141. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.