Government R&D Subsidies, Environmental Regulations, and Their Effect on Green Innovation Efficiency of Manufacturing Industry: Evidence from the Yangtze River Economic Belt of China

Abstract

The Yangtze River Economic Belt is the most important manufacturing economic belt in China. The level of manufacturing green innovation efficiency of the Yangtze River Economic Belt directly affects the overall competitiveness of China's manufacturing industry. With panel data from 11 provinces and cities along the Yangtze River Economic Belt in China for the period of 2008 to 2017, this paper applies the slacks-based measure (SBM)-data envelopment analysis (DEA) model and panel Tobit model to conduct an empirical study of the effects of government research and development subsidies and environmental regulations on the green innovation efficiency of the manufacturing industry of the Yangtze River Economic Belt. The results show that, firstly, government R&D subsidies and environmental regulations are both conducive to improving the green innovation efficiency of the manufacturing industry of the Yangtze River Economic Belt; secondly, because of the fact that the interaction terms between government R&D subsidies and environmental regulations failed to pass the significance test, the positive moderating effects of R&D subsidies on environmental regulations and green innovation efficiency of the manufacturing industry are not obvious; thirdly, in terms of control variables, strengthening agglomeration is the only factor that is positively correlated with green innovation efficiency improvement of the manufacturing industry. Enterprise scale and industrial structure have negative effects on green innovation efficiency improvement, and the openness of economy has no correlation with green innovation efficiency.

Keywords: D subsidies; environmental regulations; government R& green innovation efficiency of manufacturing industry; panel Tobit model.

Figure 1

Mechanism of the effects of government Research and Development subsidies and environmental regulation on manufacturing green innovation efficiency (MGIE). Note: ‘−, +’ represent negative and positive correlation, respectively, between R&D subsidies, environmental regulation, the interactive term of the two, and MGIE.