Environmental regulations and industrial competitiveness: evidence from China |
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| Authors: | Spyridon Stavropoulos Ronald Wall Yuanze Xu |
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| Affiliation: | 1. Department of Applied Economics and Erasmus Happiness Economic Research Organization (EHERO), Erasmus University Rotterdam, The Netherlands;2. Institute of Housing and Urban Development Studies (IHS), Erasmus University Rotterdam, The Netherlands;3. Faculty of Commerce, Law and Management, School of Economic and Business Sciences, University of the Witwatersrand, Johannesburg, South Africa |
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| Abstract: | Economic activities are closely related to real-world environmental issues. Currently, more attention is paid to the association between environmental regulations and industrial competitiveness (IC) because of pressures on economic development and environmental protection. In this study, we identify and explain the association between environmental regulations and IC in China. As the largest developing country in the world, China has the unavoidable responsibility of protecting the environment and promoting global economic development. We analyse the mechanisms behind environmental regulations and industrial competiveness at the provincial level and conclude that the impact of environmental regulations upon IC is not a simple linear one, but a U-shaped relationship. It is argued that the crucial intervention to activate the U-shaped relationship, or Porter’s Hypothesis, is innovation, which can be triggered by stringent regulations and well-designed policies. |
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| Keywords: | Environmental regulations industrial competitiveness Porter’s Hypothesis |
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