Advances in Management and Applied Economics

Does the environmental campaign in China enhance or impede firm innovation?

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  • Abstract

    This paper documents the impacts of environmental campaign on firms' innovation. Using firm-level data from CSMAR dataset, I analyze whether environmental campaign's impacts on firmsí innovation are stronger on polluting firms, firms in the environmental campaign industry and the non-SOE (State Owned Enterprises). My results show that environmental campaign enhances the innovation on the whole. Specifically, we find the polluting firms will enhance innovation after the outbreak of environmental campaign due to the disappearance of environmental campaign privilege. The environmental campaign will enhance innovation in polluting firms more than other non-polluting firms in the same industry and enhance the non-polluting firms in environmental campaign industry more than those non-polluting firms in the non-environmental campaign industry. For those non-SOE firm, the enhance effects of environmental campaign on innovation are more obvious.

    JEL classification numbers: G39
    Keywords: Innovation; Environmental Campaign