Effects of Environmental Regulation and Intellectual Property Protection on Green Technological Innovation: Evidence from China

Abstract

Green technological innovation (GTI) is a key instrument of climate change alleviation. It raises the standard of environmental protection as well as economic prosperity. However, it is difficult to promote GTI only by government involvement due to its double positive externality. It’s also crucial to have the appropriate intellectual property rights. This article adds to the body of knowledge on intellectual property protection in relation to environmental regulation and green innovation. We examine the effects of heterogeneous environmental regulations (ER) on GTI using fixed effect (FE) and system GMM (SYS-GMM) methodologies utilizing China’s provincial data from 2000 to 2019. Additionally, we further conduct a moderation analysis to examine the role of intellectual property protection (IPP) in the impacting mechanism of ER on GTI. The findings show that both ER and IPP positively affect GTI, and the promotion effect remains significant after an array of robustness analysis. However, the moderating analysis suggests that the positive effect of ER on GTI might decrease with the increase of IPP. Further analysis shows that all the different types of ER, namely command-and-control regulation (CR), market-incentive regulation (MR) and voluntary environmental regulation (VR), exert a promotion influence on GTI, while the synergetic effect of IPP and heterogenous ERs are significantly negative. Hence, it is necessary for policymakers to implement green intellectual property polices to protect and stimulate green technologies.