IDEAS home Printed from https://ideas.repec.org/a/ibn/ijefaa/v16y2024i12p44.html
   My bibliography  Save this article

Impact of Heterogeneous Environmental Regulation on Carbon Emissions: Firm-Level Evidence from China's Manufacturing Industry

Author

Listed:
  • Keminhui Liu

Abstract

Government implementation of environmental regulatory measures is typically an efficacious means of mitigating carbon emissions from firms, and the diversification of regulatory forms provides producers with diversified choice space so that enterprises can choose ecologically favorable production methods according to their own circumstances. Based on the unbalanced panel data of 2140 listed manufacturing companies in China from 2011 to 2019, this study uses a fixed-effects model to investigate the impact and mechanisms of command-and-control, market-based, and public participation environmental regulations on corporate carbon emissions. The study finds that all three types of environmental regulations significantly reduce corporate carbon emissions, and the results are robust. Mechanism tests suggest that environmental regulations can reduce corporate carbon emissions by increasing research and development (R&D) investment. Heterogeneity analysis indicates that the carbon reduction effect of environmental regulations is more pronounced in samples of enterprises in the eastern region, heavily-polluting industries, and highly marketized industries. Further analysis reveals that digital transformation negatively moderates the impact of command-and-control and public participation environmental regulations on corporate carbon emissions. The aforementioned findings offer policymakers significant empirical evidence on effectively promoting the development of low-carbon initiatives and enhancing coordination in China’ s government regulations for environmental governance.

Suggested Citation

  • Keminhui Liu, 2024. "Impact of Heterogeneous Environmental Regulation on Carbon Emissions: Firm-Level Evidence from China's Manufacturing Industry," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(12), pages 1-44, December.
    • Handle: RePEc:ibn:ijefaa:v:16:y:2024:i:12:p:44
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/ijef/article/download/0/0/50913/55184
    Download Restriction: no
    File URL: https://ccsenet.org/journal/index.php/ijef/article/view/0/50913
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Huang, Jingchang & Zhao, Jing & Cao, June, 2021. "Environmental regulation and corporate R&D investment—evidence from a quasi-natural experiment," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 154-174.
    2. Xie, Rong-hui & Yuan, Yi-jun & Huang, Jing-jing, 2017. "Different Types of Environmental Regulations and Heterogeneous Influence on “Green” Productivity: Evidence from China," Ecological Economics, Elsevier, vol. 132(C), pages 104-112.
    3. Shang, Yuping & Raza, Syed Ali & Huo, Zhe & Shahzad, Umer & Zhao, Xin, 2023. "Does enterprise digital transformation contribute to the carbon emission reduction? Micro-level evidence from China," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 1-13.
    4. Jingjing Liu & Min Zhao & Chao Zhang & Fangrong Ren, 2023. "Analysis of the Influence of Heterogeneous Environmental Regulation on Green Technology Innovation," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    5. Li, Guangqin & Xue, Qing & Qin, Jiahong, 2022. "Environmental information disclosure and green technology innovation: Empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    6. Yunfei An & Xunpeng Shi & Qunwei Wang & Jian Yu & Dequn Zhou & Xiaoyong Zhou, 2023. "China's manufacturing firms' willingness to pay for carbon abatement: A cost perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5477-5486, December.
    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. Haoyang Lu & Alistair Hunt, 2025. "Impact of Environmental Regulation on Regional Innovation in China from the Perspective of Heterogeneous Regulatory Tools and Pollution Reduction," Sustainability, MDPI, vol. 17(5), pages 1-23, February.
    2. Emmanuel Ebo Arthur & Solomon Gyamfi & Wolfgang Gerstlberger & Jan Stejskal & Viktor Prokop, 2023. "Towards Circular Economy: Unveiling Heterogeneous Effects of Government Policy Stringency, Environmentally Related Innovation, and Human Capital within OECD Countries," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    3. Tianchu Feng & Andrea Appolloni & Jiayu Chen, 2024. "How does corporate digital transformation affect carbon productivity? Evidence from Chinese listed companies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(12), pages 31425-31445, December.
    4. Liu, Duan & Yu, Nizhou & Wan, Hong, 2022. "Does water rights trading affect corporate investment? The role of resource allocation and risk mitigation channels," Economic Modelling, Elsevier, vol. 117(C).
    5. Zhuang Miao & Tomas Baležentis & Zhihua Tian & Shuai Shao & Yong Geng & Rui Wu, 2019. "Environmental Performance and Regulation Effect of China’s Atmospheric Pollutant Emissions: Evidence from “Three Regions and Ten Urban Agglomerations”," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 211-242, September.
    6. Shunbin Zhong & Huafu Shen & Ziheng Niu & Yang Yu & Lin Pan & Yaojun Fan & Atif Jahanger, 2022. "Moving towards Environmental Sustainability: Can Digital Economy Reduce Environmental Degradation in China?," IJERPH, MDPI, vol. 19(23), pages 1-23, November.
    7. Ren, Shenggang & Hu, Yucai & Zheng, Jingjing & Wang, Yangjie, 2020. "Emissions trading and firm innovation: Evidence from a natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    8. Jintao Zhang & Zhen Yang & Li Meng & Lu Han, 2022. "Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 4088-4109, March.
    9. Sun, Chuanwang & Tie, Ying & Yu, Lili, 2024. "How to achieve both environmental protection and firm performance improvement: Based on China's carbon emissions trading (CET) policy," Energy Economics, Elsevier, vol. 130(C).
    10. Xu He & Qin-Lei Jing, 2022. "The Impact of Environmental Tax Reform on Total Factor Productivity of Heavy-Polluting Firms Based on a Dual Perspective of Technological Innovation and Capital Allocation," Sustainability, MDPI, vol. 14(22), pages 1-17, November.
    11. Yanli Ji & Jie Xue & Kaiyang Zhong, 2022. "Does Environmental Regulation Promote Industrial Green Technology Progress? Empirical Evidence from China with a Heterogeneity Analysis," IJERPH, MDPI, vol. 19(1), pages 1-23, January.
    12. Stefano Bonnini & Michela Borghesi, 2024. "Nonparametric Test for Logistic Regression with Application to Italian Enterprises’ Propensity for Innovation," Mathematics, MDPI, vol. 12(18), pages 1-15, September.
    13. Kun Wang & Bing Chen & Yuhong Li, 2024. "Technological, process or managerial innovation? How does digital transformation affect green innovation in industrial enterprises?," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-32, February.
    14. Xu, Yong & Zhao, Xin & Wang, Jian & Xie, Peijun, 2023. "Clarifying the dispute of corporate social responsibility: Evidence from green technological innovation," Technology in Society, Elsevier, vol. 75(C).
    15. Nie, Yongyou & Cheng, Dandan & Liu, Kui, 2020. "The effectiveness of environmental authoritarianism: Evidence from China's administrative inquiry for environmental protection," Energy Economics, Elsevier, vol. 88(C).
    16. Feifei Yu & Jiayi Mao & Qing Jiang, 2025. "Accumulate thickly to grow thinly: the U-shaped relationship between digital transformation and corporate carbon performance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(1), pages 2135-2160, January.
    17. He, Yiqing & Ding, Xin & Yang, Chuchu, 2021. "Do environmental regulations and financial constraints stimulate corporate technological innovation? Evidence from China," Journal of Asian Economics, Elsevier, vol. 72(C).
    18. Zhao, Xing & Guo, Yifan & Feng, Tianchu, 2023. "Towards green recovery: Natural resources utilization efficiency under the impact of environmental information disclosure," Resources Policy, Elsevier, vol. 83(C).
    19. Zhang, Yijun & Li, Xiaoping & Song, Yi & Jiang, Feitao, 2021. "Can green industrial policy improve total factor productivity? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 51-62.
    20. Fu, Chao & Luo, Dianying & Zhang, Jiaoshu & Li, Wenxia, 2025. "Tax incentives, marketization level, and corporate digital transformation," International Review of Economics & Finance, Elsevier, vol. 97(C).

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    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:ibn:ijefaa:v:16:y:2024:i:12:p:44. 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: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    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.