AUTHOR=Ouyang Leqian , You Daming 

TITLE=The Green Innovation Effect on Heavy-Polluting Enterprises Under the Environmental Protection Law

JOURNAL=Frontiers in Energy Research

VOLUME=Volume 9 - 2021

YEAR=2021

URL=https://www.frontiersin.org/journals/energy-research/articles/10.3389/fenrg.2021.681334

DOI=10.3389/fenrg.2021.681334

ISSN=2296-598X

ABSTRACT=One of the main purposes of 2015 Environmental Protection Law (EPL) of the People’s Republic of China is to boost the enterprises’ green innovation. Using heavy-polluting enterprises as examples, this paper uses Difference-in-Difference (DDD) to analyze the influence of EPL on the enterprises’ green innovation under fiscal decentralization and enterprise heterogeneity. Results show that EPL exerts a negative impact on the green innovation of heavy-polluting enterprises at the national level, as well as those in the central and western areas specifically. The only possibility of positive motivation on green innovation is being found in eastern area, although the motivation seems to be insignificant. The negative impacts have been lasting in the long run, especially for the low-performance enterprises in the central areas. As for the targeted implementation of EPL in China, local governments should make the best use of financial power under fiscal decentralization. This balanced approach is designed to motivate enterprises in different regionals with various performance levels to develop green innovation based on their different weaknesses and strengths.