Environmental regulation, innovation quality and firms’ competitivity―Quasi-natural experiment based on China’s carbon emissions trading pilot

Figures & data

Table 1. Variables and definition.

Variable classification	Variable symbol	Variable definitions
Dependent variable	LP	ln(Patent + 1)
	LPi	ln(Patenti + 1)
	LPu	ln(Patentu + 1)
	LPd	ln(Patentd + 1)
	MV	Tobin’s Q
Control variable	Size	Year-end sales, take the natural logarithm
	Size^2	Squared item size
	Ages	2016 minus the firm's founding year, take the natural logarithm
	Leverage	Total liabilities/total assets
	SOE	The actual controller of the firm is the central and local SASAC, government agencies, state-owned firm, the variable is 1, otherwise 0
	COCEN	The proportion of the 1st largest shareholder (%), taken logarithm

Table 2. Descriptive statistics.

Variable	Obs	Mean	SD	Min	Max
Patent	4497	22.811	74.291	0	1276
Patenti	4497	10.434	35.664	0	684
Patentu	4497	10.99	42.87	0	842
Patentd	4497	1.387	9.619	0	263
MV	4497	1.974	1.86	0.175	10.457
Size	4497	21.562	1.472	18	25.338
Size^2	4497	467.084	64.408	324.013	642.034
Ages	4497	2.896	0.283	2.079	7.598
Leverage	4497	−0.838	0.604	−4.109	2.153
SOE	4497	0.522	0.5	0	1
COCEN	4497	3.502	0.474	2.142	4.377

Table 3. PSM Logit regression results.

Variable	Coefficient	S.E.	Z value	P value
Size	−3.101***	0.545	−5.690	0.000
Size^2	0.0752***	0.012	6.040	0.000
Ages	0.301*	0.157	1.910	0.056
Leverage	−0.376***	0.072	−5.230	0.000
SOE	−0.256**	0.088	−2.900	0.004
COCEN	−0.332***	0.093	−3.570	0.000
_cons	30.23***	6.085	4.970	0.000

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Pseudo R²=0.0242, Wald Chi2 = 100.95, Log pseudolikelihood=-1991.9191.

Table 4. PSM balance test.

Variable	Sample	Control group		Treatment group		Mean difference
		N	Mean	N	Mean
Size	Unmatched	3738	21.5361	759	21.6891	−0.1529***
	Matched	731	21.7868	731	21.6522	0.135
Size^2	Unmatched	3738	465.83	759	473.2619	−7.4319***
	Matched	731	477.1242	731	471.3855	5.739
Ages	Unmatched	3738	2.8933	759	2.9102	−0.017
	Matched	731	2.8912	731	2.9072	−0.016
Leverage	Unmatched	3738	−0.8212	759	−0.9194	0.0982***
	Matched	731	−0.9164	731	−0.9169	0.001
SOE	Unmatched	3738	0.53	759	0.4835	0.0464**
	Matched	731	0.487	731	0.4788	0.008
COCEN	Unmatched	3738	3.5103	759	3.4603	0.0500***
	Matched	731	3.4888	731	3.4664	0.022

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Table 5. Environmental regulation induced effect regression results.

Variable	DID				PSM-DID
	LP	LPi	LPu	LPd	LP	LPi	LPu	LPd
	(1a)	(1b)	(1c)	(1d)	(2a)	(2b)	(2c)	(2d)
CETS	0.488***	0.385***	0.477***	0.0112	0.799***	0.577***	0.709***	0.091
	(7.02)	(6.45)	(7.61)	(0.32)	(6.26)	(5.20)	(6.02)	(1.42)
Size	−1.245***	−1.173***	−1.787***	0.237	−0.985*	−0.996**	−1.157**	0.38
	(-4.03)	(-4.42)	(-6.41)	(1.50)	(-1.84)	(-2.14)	(-2.34)	(1.41)
Size^2	0.0404***	0.0366***	0.0505***	−0.00449	0.0339**	0.0325**	0.0353**	−0.00717
	(5.69)	(6.00)	(7.87)	(-1.23)	(2.77)	(3.06)	(3.13)	(-1.17)
Ages	−0.632***	−0.526***	−0.491***	0.0991**	−0.616***	−0.612***	−0.355**	0.136**
	(-8.26)	(-8.00)	(-7.11)	(2.53)	(-4.92)	(-5.62)	(-3.07)	(2.15)
Leverage	−0.281***	−0.227***	−0.149***	−0.0584**	−0.198**	−0.204***	−0.0891	−0.0361
	(-7.61)	(-7.15)	(-4.47)	(-3.09)	(-2.91)	(-3.45)	(-1.42)	(-1.06)
SOE	−0.219***	−0.0727*	−0.229***	−0.0811**	−0.290**	−0.147*	−0.235**	−0.0987**
	(-4.52)	(-1.75)	(-5.25)	(-3.27)	(-3.09)	(-1.80)	(-2.71)	(-2.09)
COCEN	−0.102**	−0.0918**	−0.112**	0.0560**	0.00278	−0.00533	−0.0427	0.0591
	(-2.22)	(-2.33)	(-2.71)	(2.39)	(0.03)	(-0.08)	(-0.57)	(1.44)
Constant	12.15***	11.42***	18.21***	−3.012*	9.02	9.366*	10.95**	−4.917*
	(3.60)	(3.94)	(5.97)	(-1.74)	(1.54)	(1.84)	(2.02)	(-1.67)
Province	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
N	4497	4497	4497	4497	1462	1462	1462	1462

The parenthesis are the t values, ***p < 0.01, **p < 0.05, *p < 0.1.

Table 6. Environmental regulation moderated effect regression results.

Variable	MV
	(3)	(3a)	(3b)	(3c)	(3d)
CETS	0.620***
	(4.14)
LPt-1		−0.0229
		(-0.56)
CETS*LP t-1		0.0876*
		(1.90)
LPi t-1			−0.021
			(-0.44)
CETS*LPi t-1			0.0933*
			(1.68)
LPu t-1				−0.0175
				(-0.37)
CETS*LPu t-1				0.0332
				(0.6)
LPd t-1					−0.0226
					(-0.26)
CETS*LPd t-1					0.201*
					(1.81)
Constant	76.42***	69.23***	69.13***	68.98***	69.21***
	(11.11)	(10.67)	(10.65)	(10.59)	(10.70)
Province	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes
N	1462	1350	1350	1350	1350

The parenthesis are the t values

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Table 7. Heterogeneity test: environmental regulation induced effect regression results.

Variable	State-owned shares firms				Non-state-owned shares firms
	LP	LPi	LPu	LPd	LP	LPi	LPu	LPd
	(4a)	(4b)	(4c)	(4d)	(5a)	(5b)	(5c)	(5d)
CETS	0.843***	0.726***	0.749***	0.0333	0.540**	0.298**	0.507***	0.0422
	(5.18)	(5.17)	(5.02)	(0.45)	(3.25)	(2.12)	(3.37)	(0.43)
Constant	20.99**	21.54**	18.05**	−0.579	−10.66	−8.498	7.449	−3.509
	(2.35)	(2.80)	(2.21)	(-0.14)	(-0.85)	(-0.80)	(0.65)	(-0.47)
Province	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
N	702	702	702	702	752	752	752	752

The parenthesis are the t values,

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Table 8. Heterogeneity test: environmental regulation moderated effect regression results.

Variable	State-owned shares firms					Non-state-owned shares firms
	MV
	(6)	(6a)	(6b)	(6c)	(6d)	(7)	(7a)	(7b)	(7c)	(7d)
CETS	0.248*					1.077***
	(1.87)					(4.46)
LPt-1		−0.0898**					−0.0706
		(-2.15)					(-0.91)
CETS*LP t-1		0.0501					0.233**
		(1.10)					(2.69)
LPi t-1			−0.0482					−0.0452
			(-1.00)					(-0.49)
CETS*LPi t-1			0.0116					0.247**
			(0.21)					(2.38)
LPu t-1				−0.109**					−0.115
				(-2.23)					(-1.25)
CETS*LPu t-1				0.0558					0.204*
				(1.01)					(1.88)
LPd t-1					−0.386**					−0.0353
					(-2.87)					(-0.21)
CETS*LPd t-1					0.477**					0.296
					(2.96)					(1.49)
Constant	100.9***	86.53***	85.82***	86.35***	87.34***	73.89***	85.10***	84.80***	84.70***	84.16***
	(13.86)	(11.04)	(10.92)	(11.03)	(11.16)	(4.03)	(4.62)	(4.60)	(4.57)	(4.55)
Province	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
N	702	666	666	666	666	752	666	666	666	666

The parenthesis are the t values,

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Table 9. OLS robust standard error regression results.

Variable	LP	Lpi	Lpu	LPd	MV
	(8a)	(8b)	(8c)	(8d)	(9)	(9a)	(9b)	(9c)	(9d)
CETS	0.799***	0.577***	0.709***	0.0910*	0.620***
	(5.94)	(4.96)	(6.11)	(1.72)	(4.35)
LPt-1						−0.0627*
						(-1.80)
CETS*LP t-1						0.104**
						(2.68)
LPi t-1							−0.0519
							(-1.29)
CETS*LPi t-1							0.107**
							(2.25)
LPu t-1								−0.0651*
								(-1.73)
CETS*LPu t-1								0.0568
								(1.28)
LPd t-1									0.0456
									(0.67)
CETS*LPd t-1									0.149*
									(1.74)
Province	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
N	1462	1462	1462	1462	1462	1350	1350	1350	1350
R^2	0.297	0.293	0.291	0.077	0.445	0.439	0.438	0.437	0.439

The parenthesis are the t values,

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Table 10. Optimal propensity score matching method and OLS regression results.

Variable	LP	LPi	LPu	LPd	MV
	(10a)	(10b)	(10c)	(10d)	(11)	(11a)	(11b)	(11c)	(11d)
CETS	0.536***	0.407***	0.538***	0.0487	0.547***
	(6.43)	(5.67)	(7.02)	(1.13)	(5.57)
LPt-1						−0.0226
						(-0.80)
CETS*LP t-1						0.0687**
						(2.03)
LPi t-1							−0.0143
							(-0.44)
CETS*LPi t-1							0.0719*
							(1.76)
LPu t-1								−0.0563*
								(-1.83)
CETS*LPu t-1								0.0442
								(1.12)
LPd t-1									0.0935
									(1.63)
CETS*LPd t-1									0.116
									(1.46)
Constant	13.10***	10.81***	19.85***	−2.449	61.01***	69.93***	69.76***	70.33***	70.52***
	(3.46)	(3.32)	(5.72)	(-1.25)	(13.67)	(12.22)	(12.18)	(12.27)	(12.33)
Province	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
N	3036	3036	3036	3036	3036	2100	2100	2100	2100
R^2	0.306	0.303	0.304	0.061	0.421	0.45	0.45	0.45	0.452

The parenthesis are the t values,

*** p < 0.01,

** p < 0.05,

* p < 0.1.