Search

The induced innovation hypothesis, initially proposed by Sir John Hicks, posits that as the cost of energy rises compared to other input factors, firms are motivated to engage in innovative practices to counteract the increased expenses related to energy consumption. This innovation can manifest through the development and implementation of technologies, processes, or methodologies that enhance energy efficiency or diminish overall energy dependency. In this study, we empirically examine and validate this hypothesis. By theoretically modeling how innovation responds to elevated energy costs, we exploit China's substantial surge in energy demand as an external shock to global demand, to empirically test the predictions associated with our theoretical framework. We test these predictions using firm level data in Belt and Road Initiative (BRI) countries. Our findings strongly support the induced innovation hypothesis, revealing that, on average, a 1 percent rise in the relative cost of energy corresponds to a 2.1 to 5.1 percent increase in the likelihood of innovation in energy-exporting countries and a 0.5 to 3.6 percent increase in non-energy-exporting countries. These results are robust to various methodological variations and data restriction exercises. JEL Classification: D22, D24, O13, O14 [ABSTRACT FROM AUTHOR]

This paper aims to investigate the effect of environmental regulations on inward foreign direct investment in China. For this purpose, a panel threshold model was constructed to assess the threshold effects of environmental regulations on the influx of foreign direct investments (FDI). The findings indicate that, under the influence of human capital, the impact of environmental regulations on FDI in China was characterized by a V-shaped curve, indicating an initial inhibitory effect followed by a subsequent increase. A plausible explanation is that specific pollution-generating FDI must withdraw from China because of stringent environmental regulations before human capital reaches a certain threshold level. Meanwhile, impaired by the adverse selection effect, some cleaner-production FDI cannot easily enter China. As a result, environmental regulations in this stage have an inhibitory effect on FDI in China. However, part of the pollution-generating FDI is converted into cleaner production after the human capital level reaches the threshold limit. Further, due to the positive selection effect, additional cleaner-production FDI can also enter China from different destinations. At this stage, environmental regulations boost overall FDI entering China. [ABSTRACT FROM AUTHOR]

Green technology innovation meets the dual expectation of innovative development and green development perspectives. Under the canonical demand-pull and policy-push theories, a long-term mechanism for green technology innovation could be formed through upstream policy push and downstream demand-pull. Leveraging China's regional carbon emission trading scheme pilots as a quasi-natural experiment, this paper examines the policy-push and demand-pull effects on innovation in renewable energy patents. The data pertain to the city-level renewable energy patents from 2000 to 2020. Based upon the triple difference-in-difference method, results suggest that both policy-push and demand-pull factors exert positive effects on innovation. This paper further explores the practical and theoretical implications of green technology innovation under the new development perspective. [ABSTRACT FROM AUTHOR]

Environmental subsidies are important means for the government to promote companies to fulfil environmental protection responsibilities. Employing a text analysis method, this study obtains the data on government subsidies for environmental protection of A-share listed companies in China from 2007 to 2016. Empirical estimates show that the subsidies received by companies promote their environmental inputs. Additionally, analyst tracking and internal control enhance the positive effect of subsidies on the companies' environmental investments. The above results are still valid after testing the Heckman two-stage model and the Propensity-Score-Matching and Difference-in-Difference model. This paper provides evidential support for the effectiveness of government subsidies and explores feasible ways to improve the efficiency of government subsidies based on the corporate governance channels. [ABSTRACT FROM AUTHOR]

Unlike histories emphasizing conflicts between religion and technology, this article brings to light a series of religio-technological innovations. It analyzes a dataset of international patents inspired by the practice of Islam, from the first electronic Islamic wristwatch to "The Muslim Xbox." Starting in the 1970s with a few Euro-Muslim inventions, incremental innovations addressing the "needs" of devout Muslims grew exponentially over the course of three decades as inventors from the United States to China aimed to profit from an Islamic revival and emerging "Islamic market." These inventors' devices are described here as "prescriptive machines," arguably designed not for religious flexibility but rather as disciplining mechanisms to train imagined Muslim consumers to conform to a version of orthopraxy. The article ends with an appendix explaining the methodology of researching massive international and multilingual digital databases to establish the dataset of ostensibly "Islamic" patents. [ABSTRACT FROM AUTHOR]

This paper constructs a dynamic computable general equilibrium (DCGE) model to investigate the macroeconomic effects of endogenous technical progress in achieving China's 2030 carbon intensity reduction target of 60–65% compared with 2005. We show that a combination of a carbon tax and technological progress can achieve the carbon intensity target in 2030, but it will exert a negative impact on economic growth. This negative effect, however, can be relieved by endogenously directed technological progress in the long term. In doing so, industrial structure and energy structure are dynamically adjusted by inhibiting the output and employment of the coal and oil sectors but promoting that of the clean energy and the service industry. We also find that with technological progress, the unit carbon abatement cost in the long term is estimated to be 200–250 yuan/ton, much lower than that in the short term (over 367 yuan/ton). Several policy implications are discussed accordingly. [ABSTRACT FROM AUTHOR]

Objective: The answer to this article lies in: Does the financial activities of physical enterprises have an adverse impact on their main business? Is it conducive to the sustainable development of the national economy? However, when most scholars study the impact of environmental regulations on companies performance, they have not classified companies performance. This article will study the relationship between environmental regulations and performance levels based on the classification of companies performance, and then divide the nature of industry pollution, companies location and nature of property for in-depth research. Methods: First, this article uses a random effect variable-intercept model to measure companies financial performance and non-financial performance. Then, the variables are divided into two variable groups: light pollution and heavy pollution according to the nature of industry pollution. Next, the companies are divided into three variable groups: the eastern region, the central region, and the western region. Finally, the company is divided into two variable groups: state-owned and non-state-owned according to the nature of property. Conclusions: The study found that: (1) Environmental regulations have inhibited companies financial activities. And the inhibitory effect of environmental regulations on the financial performance of enterprises is more obvious in the heavily polluting industries and enterprises in central and eastern regions. (2) Environmental regulations and companies non-financial performance are also negatively related, environmental regulations have also inhibited the non-financial performance of companies, this effect is more pronounced in heavily polluting industries and enterprises in western regions. (3) Income crowding effect brought by China's environmental regulations is greater than the income compensation effect brought by stimulating technological innovation. [ABSTRACT FROM AUTHOR]

China's ongoing urban economic growth has sharply increased the population's per capita income, lowered the count of people living below the poverty line, and caused major environmental problems. We survey the growing literature investigating the causes and consequences of China's urban pollution challenges. We begin by studying how urban population and industrial growth impacts local pollution levels and greenhouse gas production. As the urban population grows richer, its demand for private transportation and electricity sharply increases. Such privately beneficial activity exacerbates urban pollution externalities. Facing these severe environmental challenges, China's urbanites increasingly demand quality of life progress. We survey the emerging literature investigating the demand for environmental progress in China. Progress in mitigating externalities hinges on whether the powerful central and local governments choose to address these issues. We analyze the political economy of whether government officials have strong incentives to tackle lingering urban externalities. We conclude by discussing future research opportunities at the intersection of environmental and urban economics. (JEL O18, P25, P28, Q53, R23, R41, R58) [ABSTRACT FROM AUTHOR]

The present paper calculates 35 industrial sectors' similarity matrices for the period of 1997-2008 using China's input-output tables for 1997, 2002 and 2007, and uses these to measure inter-industry technology spillover to analyze the spillover effects on industrial sectors' labor productivity. The empirical analysis shows that inter-industry technology spillover has a significant positive effect on the labor productivity of each industry. The elasticity of productivity effects of inter-industry technology spillover is not only larger than that of direct R&D input, but also increases over time. We group the industries into four major categories and find that the inter-industry technology spillover effect within the categories is, on average, greater than that between the four categories, indicating that technology spillover occurs more easily between similar industries. This research shows that the interindustry technology spillover effect in China has begun to increase, and the government should take advantage of this effect. [ABSTRACT FROM AUTHOR]

This article examines the determinants and interregional spillovers of regional productivity and multinational enterprise (MNE) research and development (R&D) in China. The authors apply a two-equation recursive model to a panel data set of thirty provinces and equivalents from 1998 to 2005. The estimated MNE R&D location equation indicates that the main determinants of MNE R&D location are supply-side factors—the availability of scientists and engineers, the average salary of R&D personnel, regional infrastructure, and spillovers of MNE R&D in the neighboring regions, but not demand-side factors such as the size of regional market and the previous foreign direct investment (FDI). Moreover, MNE R&D has a strong tendency to locate in regions with an export-oriented economy. The productivity equation reveals a significant causal relationship between MNE R&D investment and regional productivity. The estimates further indicate that regional productivity is determined not only by factor inputs within own region but also by productivity in the neighboring regions. In conclusion, the authors briefly discuss the policy implications of the findings for increasing the productivity of different regions and using MNE R&D. [ABSTRACT FROM AUTHOR]

Using data from 1986–2005, the present paper estimates the impact of direct knowledge spilled over from G-7 countries on China's economy. We use telephone line penetration rates and personnel flows to estimate the direct spillover effect. Our results show that direct knowledge spillovers through telecommunication networks and personnel flows are important components of international R&D spillovers in China. These direct channels of spillover effectively accelerate China's economic growth. Therefore, China should invest more in human capital and in its telecommunication network to enhance the absorptive capacity of direct R&D spillovers, and to increase communication with other nations, in particular the USA and Japan. More subsidies to domestic R&D research and purchase of intermediate goods will help to raise China's R&D intensity. [ABSTRACT FROM AUTHOR]