Research On Green Technology Innovation And Its Spillover Effect Under The Pressure Of Local Environmental Governance

China’s has experienced a remarkable rapid growth since the Reform and Opening Up,but at the same time it is facing serious environmental pollution.A large number of documents have proved that green technological innovation is the main driving force for solving resource and environmental problems,fighting a tough battle for pollution prevention and control,promoting ecological civilization construction and realizing high-quality economic development.Therefore,how to effectively drive enterprises to carry out high-quality green technology innovation has become an important topic of current practice and academic circles.The central government has issued and updated a series of environmental protection policies,rules and regulations,requiring local governments to fulfill their environmental responsibilities,carry out environmental inspection and inspection visits,to establish a target accountability system for environmental quality and an evaluation and assessment mechanism,enhance officials’ willingness to protect the environment,and strengthen local governments’ responsibility for pollution control.Although the central government attaches great importance to environmental pollution and green innovation,whether the central green development concept can be effectively translated into the improvement of local environmental quality and the improvement of enterprise environmental innovation depends on the response strategies of local governments and polluters when they face the central environmental protection policy.First of all,as the main regulatory body of environmental pollution control,local governments should effectively intervene in the investment decisions of enterprises within their jurisdiction,guide enterprises to carry out green production and green innovation,and take the road of green development.However,under The GDP assessment,local governments often lack sufficient incentives to urge polluting enterprises to carry out environmental governance and green innovation.In addition,green innovation has dual externalities for enterprises,which lack motivation to carry out green innovation independently.In order to improve the willingness of local governments to tackle environmental pollution,the central government and the Ministry of Environmental Protection have introduced a series of policies and regulations linking environmental governance with promotion opportunities for local officials.Although the central environmental performance appraisal system is becoming more and more strict,the opacity and maneuverability of environmental quality data weaken the its promotion effect on local officials’ environmental governance motivation.The Ministry of Environmental Protection issued the Environmental Air Quality Standard(2012)and determined the implementation of the new standard“three-step” plan,requiring the air quality data to be unified,comprehensive and real-time open to the public,the superior government and the news media.Local governments can no longer manipulate environmental quality data to achieve environmental performance appraisal targets,thus greatly increasing officials’ incentives to clean up the environment.Based on this,this paper firstly discusses the impact of environmental performance assessment of officials and transparency of assessment indicators on the quantity and quality of green technology innovation brought by environmental governance pressure on local governments from a macro institutional perspective.Secondly,this paper discusses the incentive mechanism of green innovation at the enterprise level from the perspective of micro-enterprise stakeholders and peer enterprises,that is,does green innovation have spillover effect in the industry,space and supply chain? Specifically,using Chinese A-share nonfinancial listed firms from 2007 to 2020 as samples,this paper investigates the impact of local environmental governance pressure on enterprise green innovation and the spillover effect of enterprise green innovation between supply chain and peer enterprises,and further analyzes the mechanism behind it.The results show that:First,local environmental governance pressure helps drive enterprises to carry out green innovation.Specifically,the fourth chapter of this paper takes “Ambient Air Quality Standard(2012)” and its implementation plan as exogenous policy impact,and uses the dual difference method to test the influence of the change of officials’ environmental governance motivation on the quantity and quality of enterprises’ green innovation.It is found that the implementation of the new Ambient Air Quality Standard drives the green innovation of heavy polluting industries,mainly in terms of the quantity of green innovation,but has no obvious impact on the quality of green innovation,that is,the improvement of local environmental governance pressure promotes the quantity of green innovation of heavy polluting enterprises.Heterogeneity test shows that the greater the intensity of intellectual property protection,the higher the quality of local government,the lower the pressure of economic growth,and the greater the pressure of environmental governance,the greater the impact of local environmental governance pressure on green innovation of heavily polluting enterprises.Mechanism test found that the implementation of air quality standards,the increased pressure on local environmental governance through increasing the enthusiasm of public supervision,media supervision,and improve the government’s environmental protection law enforcement and environmental protection expenditure to promote green innovation.Secondly,green innovation has supply chain spillover effect.In chapter 5,we use the data of the top five listed customer companies and the data of green patent application to test whether there is spillover effect of green innovation in the supply chain.It is found that the green concept of environment-friendly customers will spill over to suppliers through the production network and promote them to carry out green innovation,which is reflected in the increase of the number of green innovation and the proportion of green patents in the total number of patent applications.Heterogeneity test shows that the spillover effect of customer on supplier’s green innovation is more significant with stronger public awareness of environmental protection,higher media attention,direct contact between customer’s products and consumers,and product preference for export.It is found that geographical distance,cultural similarity,stability of the relationship between customer and supplier,and customer bargaining power are the mechanisms of customer’s green innovation spillover effect on supplier.Economic consequences,the study found the customer of the supplier of green innovation spillover effects not only improve their market share and the enterprise value,and improve the operational efficiency of the supplier to the firm’s environmental performance,and market share and firm’s value,show that customer green supply chain management can bring positive economic benefits to the whole supply chain.Finally,green innovation has peer spillover effects.In chapter 6,the existence and formation mechanism of green innovation peer spillover effect are deeply analyzed from the perspective of mutual imitation among enterprises,and the economic consequences of green innovation peer spillover effect are further discussed.The results show that green technology innovation of enterprises has peer spillover effect of industry and space,that is,the improvement of green technology innovation level of enterprises in the same industry(same region)can promote the green technology innovation activities of related enterprises;The spillover effect is more obvious when senior executives are more environmentally conscious,the public is more environmentally conscious,and intellectual property rights are more strongly protected.By examining the formation mechanism of peer spillover effect,it is found that the peer spillover effect of green innovation comes from competitive incentive mechanism,knowledge spillover mechanism and reputation mechanism.The study of economic consequences shows that the peer effect of green innovation is a rational choice,which helps enterprises to improve the growth of sales revenue and enterprise value.The main research contributions of this paper are:First,from the perspective of political economy,this paper systematically examines the impact of macro environmental policies on micro enterprise behavior,and expands the literature on how environmental regulations affect green innovation.Scholars has studied the influence of environmental regulation on environmental governance and transfer,industrial upgrading,technological progress and productivity growth,and macro-economy.They paid more attention to the influence of a specific environmental regulation,such as environmental subsidies and sewage charges,on the number of green patent applications by firms,while the motivation of local governments,the main body of environmental regulation implementation and supervision,is seldom included.Therefore,it is impossible to distinguish whether the root cause of the failure of local environmental governance effect and the poor effect of firms in emission reduction and energy conservation is the lack of governance motivation of officials or just the lack of environmental regulation strength,and it is also difficult to alleviate the endogenous problems that may exist between environmental regulation and enterprise behavior.Taking the promulgation and implementation of new standards as the impact,this paper examines the change of local officials’ motivation for environmental governance,which is conducive to causal identification of the impact of the change of officials’ motivation on firms’ investment decisions for green innovation.Second,this paper enriches the literature on the impact of official assessment methods on economic growth,and provide empirical evidence for the effect of the central government’s policies to promote green development.In the context of highquality economic development,different from previous literature on the impact of GDP assessment on innovation of officials,this paper firstly investigated the impact of environmental governance pressure based on environmental performance assessment on the quantity and quality of green technology innovation of enterprises.This paper examines the impacts of pressure of local government environmental governance to the microscopic firms’ green innovation behavior and the mechanisms.Further deepen the understanding of how official environmental performance assessment can promote local green development transformation.Thirdly,this paper focuses on a unique and novel channel of spillover,the vendor-customer relationship in the production network,which extends and complements the research on the spillover effect.Existing studies on spillover effects mainly focus on competitors,enterprises in the same industry and enterprises in the same region(Arora et al.,2021;Holzman et al.,2021),and this paper focuses on a new channel of spillover effect,the supply chain relationship.We not only investigate the spillover effect of firm green innovation in production network relationship,but also deeply explores its spillover mechanism,and finds that customer green innovation has spillover effect in the supply chain.Knowledge spillover effect and demand expansion mechanism are the main mechanism of green innovation spillover in supply chain due to geographical proximity,similar cultural concept,stable cooperative relationship and strong bargaining power of customers.In addition,previous studies on the relationship between customer and supplier are mainly based on the economic importance of customers,namely customer concentration,to statically examine their positive and negative effects on enterprises(Banerjee et al.,2008;Itzkowitz,2013;Jiang et al.,2019),while paying little attention to the longitudinal chain of supply chain.Other important characteristics of customers will also affect the behavior of suppliers.For example,whether corporate customers with environmental awareness can inject similar social awareness into suppliers,thus affecting the investment and operation decisions of suppliers.In this paper,the literature on customer concentration is dynamically extended to supplier behavior,enriching the literature in the field of vendorcustomer relationship.Fourthly,this paper extends the research on peer effect to the green technology innovation activities of enterprises with unique characteristics,and provides incremental research contributions to the research on peer effect by examining the spillover effect and mechanism of the green technology innovation level of peer enterprises on enterprises.It also reveals the more real decision-making motivation and driving force of green innovation,and provides guidance for how to drive and motivate firms to invest green innovation.This article is different from the previous research based on macro environmental regulations and internal factors.Based on the enterprise behavior of learning from each other as the breakthrough point,the study found that the corporate green innovation has peer effects,providing a new perspective to understand the enterprise why engaged in green innovation.In addition,this paper does not simply stay on the verification of peer effect of enterprise green innovation,but analyzes the formation mechanism of peer effect of enterprise green innovation from multiple channels such as competitive incentive mechanism,knowledge spillover mechanism and reputation mechanism,thus enriching the connotation of peer effect research.Research on economic consequences of enterprise investment imitation behavior considered in irrational imitation,will bring adverse effect,and this paper further reveals that the peer effects the economic consequences of green innovation,found that the peer effects of green innovation is rational choice,which can help firms improve sales and firm value.This paper enriches the literature on the economic consequences of peer effect.