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Opportunity Cost of Environmental Regulation in China’s Industrial Sector
- Source :
- International Journal of Environmental Research and Public Health, International Journal of Environmental Research and Public Health, Vol 18, Iss 8579, p 8579 (2021), Volume 18, Issue 16
- Publication Year :
- 2021
- Publisher :
- MDPI, 2021.
-
Abstract
- In this paper, we employ a directional distance function to estimate the opportunity cost arising from environmental regulations in China’s industrial sector. The change of opportunity cost is decomposed mathematically into two components including technical change and input change. Our results show that the opportunity cost attributed to environmental regulation is nil in some regions. The change of opportunity cost is marginal at the national level, as the positive effect of technical change is canceled out by the negative impact of input change on opportunity cost. Built on our mathematical decomposition, we further estimate the effects of environmental regulations on opportunity cost using a mediation model. It shows that environmental regulation has a significantly positive direct effect and a significantly negative indirect effect through foreign direct investment on opportunity cost. Our findings suggest, firstly, that inward FDI in China’s industrial sector represents relatively dirty production technology<br />and, secondly, industrial production has transited towards a less carbon-intensive input mix. This paper, therefore, provides new insights for the recent dynamics of carbon abatement performance of China’s industrial sector with policy implications.
- Subjects :
- China
Technology
Opportunity cost
Health, Toxicology and Mutagenesis
Industrial production
Public Health, Environmental and Occupational Health
Foreign direct investment
input change
mediation effect
Technical change
Article
Carbon
technical change
environmental regulation
Secondary sector of the economy
Mediation
Production (economics)
Medicine
opportunity cost
Industry
Business
Investments
Industrial organization
Subjects
Details
- Language :
- English
- ISSN :
- 16604601 and 16617827
- Volume :
- 18
- Issue :
- 16
- Database :
- OpenAIRE
- Journal :
- International Journal of Environmental Research and Public Health
- Accession number :
- edsair.doi.dedup.....8953e74f20451afda69bec246de373f7