The effect of command-and-control regulation on environmental technological innovation in China: a spatial econometric approach

Combining with the spatial variations in environmental technological innovation cross-province in China, this study employs the spatial econometric model to explore how environmental technological innovation responds to changes in command-and-control regulation and three other traditional determinants (the environmental R&D investments, the environmental labor force inputs, and the provincial economic development level) during the study period from 2004 to 2016. The results indicate that there is a clear sign of spatial correlation in the environmental technological innovation according to the global and local indicators of spatial association. Then, considering the spatial interdependence of environmental technological innovation and holding other variables constant, evidence shows that command-and-control regulation has a significant adverse effect on environmental technological innovation in the whole country and the Eastern region, while the effect is statistically positive in the Western region and non-significant in the Central region. We also find that the effects in two sub-periods of 2004-2010 and 2011-2016 are obvious differences because some new command-and-control regulation instruments were formulated and implemented in 2010. In addition, environmental technological innovation is also directly catalyzed by the environmental R&D investments, the environmental labor force inputs, and the provincial economic development level.