Mandatory Environmental Regulation and Green Technology Innovation: Evidence from China

Faced with the severe situation of high energy consumption and major pollutant emissions, the Chinese government has adopted various mandatory environmental regulations (MERs) to improve the binding force of environmental protection policy implementation. In 2006, the environmental protection target responsibility system was implemented, and the energy conservation and emission reduction targets were linked to the performance assessment of government officials as a binding indicator. What is the impact of this policy on green technology innovation activities? Based on this, this paper identifies the relevant indicators of green technology innovation activities. It uses the difference-in-differences (DID) method to investigate the impact of mandatory environmental regulation on the quantity and quality of green technology innovation activities. The conclusions are as follows: (1) The implementation of MERs promoted the expansion of the number of green patent applications. (2) MERs also led to the decline of the quality and the emergence of the foaming phenomenon. (3) Enterprises with weak innovation ability are the main group causing the decline of green technology innovation quality, and they are concentrated in independent innovation and low-level pollution industries. The conclusion of this paper helps provide a theoretical basis and countermeasures for deepening the reform of the MER policy, strengthening the coordination of different environmental regulation tools, and establishing a market-oriented green technology innovation system and environmental protection science and technology policy.