IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v81y2022i1d10.1007_s10640-021-00614-5.html
   My bibliography  Save this article

The Impact of Exogenous Pollution on Green Innovation

Author

Listed:
  • Ying Wang

    (Texas A&M University)

  • Richard T. Woodward

    (Texas A&M University)

  • Jing-Yue Liu

    (Hunan University)

Abstract

Does environmental quality affect firms’ activities that might improve that quality? In this paper, we use China's public heating policy as a quasi-experiment to investigate the impact of exogenous pollution differences on green innovation behavior. We use a regression discontinuity model, and carry out a suite of robustness tests. We consistently find that firms located in cities with an exogenous source of heavy pollution tend to adopt green innovation at a lower rate while we find no difference in the rate at which they adopt non-green innovation. We find a strong causal effect: being north of the boundary, where pollution levels are higher, leads firms to adopt less green innovation. Firms located in the heating areas report roughly 1 less green innovation per billion RMB of assets, a substantial difference given the average number of green innovations per billion RMB of assets of northern firms is 0.641.

Suggested Citation

  • Ying Wang & Richard T. Woodward & Jing-Yue Liu, 2022. "The Impact of Exogenous Pollution on Green Innovation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(1), pages 1-24, January.
    • Handle: RePEc:kap:enreec:v:81:y:2022:i:1:d:10.1007_s10640-021-00614-5
    DOI: 10.1007/s10640-021-00614-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-021-00614-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-021-00614-5?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 look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul Lanoie & Jérémy Laurent‐Lucchetti & Nick Johnstone & Stefan Ambec, 2011. "Environmental Policy, Innovation and Performance: New Insights on the Porter Hypothesis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 803-842, September.
    2. Douglas Almond & Yuyu Chen & Michael Greenstone & Hongbin Li, 2009. "Winter Heating or Clean Air? Unintended Impacts of China's Huai River Policy," American Economic Review, American Economic Association, vol. 99(2), pages 184-190, May.
    3. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    4. Keele, Luke J. & Titiunik, Rocío, 2015. "Geographic Boundaries as Regression Discontinuities," Political Analysis, Cambridge University Press, vol. 23(1), pages 127-155, January.
    5. Brunnermeier, Smita B. & Cohen, Mark A., 2003. "Determinants of environmental innovation in US manufacturing industries," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 278-293, March.
    6. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    7. Sebastian Calonico & Matias D. Cattaneo & Rocío Titiunik, 2015. "Optimal Data-Driven Regression Discontinuity Plots," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 110(512), pages 1753-1769, December.
    8. Wenlong He & Rui Shen, 2019. "ISO 14001 Certification and Corporate Technological Innovation: Evidence from Chinese Firms," Journal of Business Ethics, Springer, vol. 158(1), pages 97-117, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Han Long & Gen‐Fu Feng & Qiang Gong & Chun‐Ping Chang, 2023. "ESG performance and green innovation: An investigation based on quantile regression," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 5102-5118, November.
    2. Jing Tang & Shilong Li, 2022. "How Do Environmental Regulation and Environmental Decentralization Affect Regional Green Innovation? Empirical Research from China," IJERPH, MDPI, vol. 19(12), pages 1-16, June.

    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. Genqiang Lei & Xiaohong Huang & Penghui Xi, 2016. "The impact of transfer payments on urban-rural income gap: based on fuzzy RD analysis of China’s midwestern county data," China Finance and Economic Review, Springer, vol. 4(1), pages 1-17, December.
    2. Salazar, Lina & Maffioli, Alessandro & Aramburu, Julián & Agurto Adrianzen, Marcos, 2016. "Estimating the Impacts of a Fruit Fly Eradication Program in Peru: A Geographical Regression Discontinuity Approach," IDB Publications (Working Papers) 7505, Inter-American Development Bank.
    3. Jin-young Choi & Myoung-jae Lee, 2017. "Regression discontinuity: review with extensions," Statistical Papers, Springer, vol. 58(4), pages 1217-1246, December.
    4. Yang Liu & Yaojun Fan & Yifan Wang & Jiayu Huang & Hu Xun, 2024. "City innovation ability and internet infrastructure development: Evidence from the “Broadband China” policy," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 121-146, January.
    5. Deng, Taotao & Hu, Yukun & Ma, Mulan, 2019. "Regional policy and tourism: A quasi-natural experiment," Annals of Tourism Research, Elsevier, vol. 74(C), pages 1-16.
    6. Ari Hyytinen & Jaakko Meriläinen & Tuukka Saarimaa & Otto Toivanen & Janne Tukiainen, 2018. "When does regression discontinuity design work? Evidence from random election outcomes," Quantitative Economics, Econometric Society, vol. 9(2), pages 1019-1051, July.
    7. Daniel A. Brent & Corey Lott & Michael Taylor & Joseph Cook & Kimberly Rollins & Shawn Stoddard, 2020. "What Causes Heterogeneous Responses to Social Comparison Messages for Water Conservation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 503-537, November.
    8. Likai Chen & Georg Keilbar & Liangjun Su & Weining Wang, 2023. "Tests for Many Treatment Effects in Regression Discontinuity Panel Data Models," Papers 2312.01162, arXiv.org.
    9. Matias D. Cattaneo & Luke Keele & Rocío Titiunik & Gonzalo Vazquez-Bare, 2021. "Extrapolating Treatment Effects in Multi-Cutoff Regression Discontinuity Designs," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1941-1952, October.
    10. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    11. Christian Ochsner, 2023. "Hostility, Population Sorting, and Backwardness: Quasi-Experimental Evidence from the Red Army after WWII," CERGE-EI Working Papers wp768, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    12. Satyakti, Yayan, 2020. "Do Human Restriction Mobility Policy in Indonesia effectively reduce The Spread of COVID-19," MPRA Paper 101911, University Library of Munich, Germany.
    13. Pasquini, Ricardo A., 2021. "Effects of regulating the brokerage commission in the rental market: Evidence from Buenos Aires," Journal of Housing Economics, Elsevier, vol. 54(C).
    14. Xingchi Shen & Yueming Lucy Qiu & Pengfei Liu & Anand Patwardhan, 2022. "The Effect of Rebate and Loan Incentives on Residential Heat Pump Adoption: Evidence from North Carolina," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 741-789, July.
    15. Cappelletti, Giuseppe & Guazzarotti, Giovanni & Tommasino, Pietro, 2017. "The stock market effects of a securities transaction tax: Quasi-experimental evidence from Italy," Journal of Financial Stability, Elsevier, vol. 31(C), pages 81-92.
    16. Di Giacomo, Marina & Piacenza, Massimiliano & Siciliani, Luigi & Turati, Gilberto, 2022. "The effect of co-payments on the take-up of prenatal tests," Journal of Health Economics, Elsevier, vol. 81(C).
    17. Matias D. Cattaneo & Rocío Titiunik, 2022. "Regression Discontinuity Designs," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 821-851, August.
    18. Jose Valderrama & Javier Olivera, 2023. "The effects of social pensions on mortality among the extreme poor elderly," LISER Working Paper Series 2023-05, Luxembourg Institute of Socio-Economic Research (LISER).
    19. Burgherr, David, 2022. "Behavioral Responses to a Pension Savings Mandate : Quasi-experimental Evidence from Swiss Tax Data," CAGE Online Working Paper Series 645, Competitive Advantage in the Global Economy (CAGE).
    20. Quinn Keefer & Galib Rustamov, 2018. "Limited attention in residential energy markets: a regression discontinuity approach," Empirical Economics, Springer, vol. 55(3), pages 993-1017, November.

    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:kap:enreec:v:81:y:2022:i:1:d:10.1007_s10640-021-00614-5. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.