Prague Economic Papers 2021, 30(3):358-377 | DOI: 10.18267/j.pep.768

Environmental Regulation, Entrepreneurship and Economic Growth: An Empirical Study Based on Threshold Effect Test in China

Ma Weidong ORCID...a,b, Wu Cheng Chung ORCID...c, Tang Deshan ORCID...a
a Hohai University, Business School, Nanjing, Jiangsu, China
b Suqian University, Business School, Suqian, Jiangsu, China
c Jiaxing University Nanhu College, Business College, Zhejiang, China

Based on panel data from 2000 to 2017 on 30 provinces in China, we analyse the threshold effect of environmental regulation on the quality improvement of economic growth in Eastern, Central, and Western China using a threshold regression model with entrepre-neurship as the threshold variable. The conclusions are as follows: (1) With a low entre-preneurship index, environmental regulation inhibits the quality of regional economic growth. When the entrepreneurship index is at a middle level, the effect changes from an original adverse impact to a favourable impact, which is very significant in Eastern and Western China, but not significant in Central China. When entrepreneurship is highly active, environmental regulation is beneficial to economic growth quality in all regions, and environmental regulation can bring into play the function of "reversed mechanism" to promote economic growth quality. (2) The differences in entrepreneurship level in the three regions lead to regional heterogeneity of the threshold effect between environmental regulation and economic growth quality. Eastern China realizes a double dividend of environmental improvement and economic growth. The entrepreneurial activity in the Central and Western regions is a little far away from their threshold values, at which environmental regulation can produce a significant incentive effect. In conclusion, we put forward three suggestions to improve the entrepreneurial activity and fully realize the double dividend of environmental improvement and economic growth.

Keywords: Environmental regulation, entrepreneurship total factor productivity, threshold effect test
JEL classification: O47

Received: November 18, 2019; Revised: October 26, 2020; Accepted: December 7, 2020; Prepublished online: February 10, 2021; Published: June 11, 2021  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Weidong, M., Cheng Chung, W., & Deshan, T. (2021). Environmental Regulation, Entrepreneurship and Economic Growth: An Empirical Study Based on Threshold Effect Test in China . Prague Economic Papers, 30(3), 358-377. doi: 10.18267/j.pep.768
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Audretsch, D. B., Fritsch, M. (2003). Linking Entrepreneurship to Growth: the Case of West Germany. Industry and Innovation, 10(1), 65-73, https://doi.org/10.1080/1366271032000068104 Go to original source...
    2. Battese, G. E. (1992). Frontier Production Functions and Technical Efficiency: A Survey of Empirical Applications in Agricultural Economics. Agricultural Economics, 52(7), 185-207, https://doi.org/10.1016/0169-5150(92)90050-9 Go to original source...
    3. Baumol, W. J. (1990). Entrepreneurship: Productive, Unproductive, and Destructive. Journal of Political Economy, 98(5), 893-921, http://doi.org/10.1086/261712 Go to original source...
    4. Chen, Y. Z., Xia, X. (2018). An Empirical Study on the Relationship between Environmental Regulation and Economic Growth in Northeast China. Learning and Exploration, 14(9), 119-125
    5. Ederington, J., Minier, J. K. (2003). Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis. Canadian Journal of Economics, 36(1), 137-154, https://doi.org/10.2139/ssrn.198408 Go to original source...
    6. Ferreira, J. J., Fayolle, A., Fernandes, C., et al. (2017). Effects of Schumpeterian and Kirznerian entrepreneurship on economic growth: panel data evidence. Journal of Entrepreneurship & Regional Development, 29(2), 1-24, https://doi.org/10.1080/08985626.2016.1255431 Go to original source...
    7. Ford, J. A., Steen, J., Verreynne, M. L. (2014). How Environmental Regulations Affect Innovation in the Australian Oil and Gas Industry: Going Beyond the Porter Hypothesis. Journal of Cleaner Production, 84(1), 204-213, https://doi.org/10.1016/j.jclepro.2013.12.062 Go to original source...
    8. Jaffe, A. B., Palmer, K. L. (1997). Environmental Regulation and Innovation: A Panel Data Study. Review of Economics & Statistics, 79(4), 610-619, https://doi.org/10.1162/003465397557196 Go to original source...
    9. Jiang, Z. H. (2015). The Connotation and Extension of Entrepreneurship. Journal of Ocean University of China (Social Sciences), 10(1), 71-77, https://doi.org/10.16497/j.cnki.1672-335x.2015.01.011 Go to original source...
    10. Kumbhakar, S. C. (2014). Stochastic Frontier Analysis. New York: Cambridge University Press.
    11. Li, H., Zou, Q. (2018). Study on Environmental Regulation, Resource Endowment and Urban Industrial Transformation. Economic Research, 15(11), 182-198
    12. Li, Y. X., Zeng, C. (2019). Government Scale, Technological Innovation and High Quality Development. Journal of Fudan University (Social Science Edition), 11(3), 155-166, https://doi.org/10.3969/j.issn.0257-0289.2019.03.016 Go to original source...
    13. Luthans, F., Stajkovic, A. D., Ibayeva, E. (2000). Environmental and Psychological Challenges Facing Entrepreneurial Development in Transitional Economies. Journal of World Business, 35(1), 95-110, https://doi.org/10.1016/S1090-9516(99)00035-8 Go to original source...
    14. McMillan, J., Woodruff, C. (2002). The Central Role of Entrepreneurs in Transition Economies. Journal of Economic Perspectives, 16(3), 153-170, https://doi.org/10.1257/0895330027 60278767 Go to original source...
    15. Porter, M. E., Class, V. D. L. (1995). Toward a New Conception of the Environment- Competitive- ness Relationship. Journal of Economic Perspectives, 9(4), 97-118, https://doi.org/10.1257/jep.9.4.97 Go to original source...
    16. Santos, F. J., Guzmán, C. (2019). Social Capital, Personal Values and Economic Development: Effect on Innovation. An International Analysis. The European Journal of Social Sciences, 33(1), 70-95, https://doi.org/10.1080/13511610.2019.1626701 Go to original source...
    17. Sun, Y. J., Lin, C. (2018). Study on Environmental Regulation and the Quality Improvement of China's Economic Growth: A Perspective Based on Environmental Kuznets Curve. Shanghai Economic Review, 21(3), 84-94, https://doi.org/10.19626/j.cnki.cn31-1163/f.2018.03.009 Go to original source...
    18. Wang, H. Q. (2016). The Threshold Effect of Environmental Regulation on Economic Growth from the Perspective of Human Capital. Chinese Soft Science, 16(6), 52-61, https://doi.org/10.3969/j.issn.1002-9753.2016.06.006 Go to original source...
    19. Yang, C. H., Tseng, Y. H., Chen, P. (2012). Environment Regulations, Induced R&D, and Productivity: Evidence from Taiwan's Manufacturing Industries. Resource & Energy Economics, 34(4), 514-532, https://doi.org/10.1016/j.reseneeco.2012.05.001 Go to original source...
    20. Yu, Y. Z. (2017). There Estimation of Total Factor Productivity in China's Provinces from the Perspective of Heterogeneity: 1978-2012. Economics, 19(4), 1051-1072, https://doi.org/10.13821/j.cnki.ceq.2017.02.10 Go to original source...
    21. Zeng, C., Guo, B., Luo, S. G. (2015). A Literature Review on the Relationship between Entrepreneurial Spirit and Transformation of Economic Growth Mode. Economic Research, 9(2), 120-128
    22. Zhang, C., Lu, Y., Guo, L. (2011). Environmental Regulation Intensity and Technological Progress in Production. Economic Research, 21(2), 113-122
    23. Zhang, H. (2017). Strategic Interaction Study on Regional Environmental Regulation: Interpretation of the Universality of Environmental Regulation's Incomplete Implementation. China's Industrial Economy, 25(7), 74-90, https://doi.org/10.19581/j.cnki.ciejournal.2016.07.006 Go to original source...
    24. Zhang, J., Wu, G. Y., Zhang, J. P. (2004). Estimation of China's Provincial Physical Capital Stock: 1952-2000. Economic Research, 15(10), 35-44. Available at: http://www.cnki.com.cn/Article/CJFDTotal-JJYJ200410004.htm
    25. Zhao, X. W. (2014). Environmental Regulation, Competition of Environmental Regulation and Regional Industrial Economic Growth---An Empirical Study Based on Spatial Durbin Panel Model. International Trade Issues, 12(3), 2-49, https://doi.org/10.13510/j.cnki.jit.2014.07.009 Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content