How Environmental Regulation Affects Green Investment of Heavily Polluting Enterprises: Evidence from Steel and Chemical Industries in China

Round 1

Reviewer 1 Report

Thanks for giving me the opportunity to review this work. The topic is interesting however there are several issues need to be addressed

1.       firstly, the structure of the sentences is inappropriate and need to be checked properly and arranged such as in the abstract” This paper uses multiple regression analysis to examine empirically investigate the impact of environmental regulation on green investment of heavily polluting enterprises in China. This sentence structure is incorrect. There are also several statement and sentences which need to rearranged and structured.

2.       The authors should mention which data is used and the time period in the abstract before the results summary.

3.       There are some statements in the text which need to be supported with reference. The introduction should cite some recent studies and the innovation of the study need to be further highlighted.

4.       This study is interesting however the authors should provide the heading literature review and cite recently published papers to better highlight the gap. I give few articles for literature  https://doi.org/10.3390/su14148836, https://doi.org/10.56556/jescae.v1i3.226, https://doi.org/10.56556/jescae.v1i3.124

https://doi.org/10.56556/jescae.v1i2.11

https://doi.org/10.56556/jescae.v1i2.97

1.       The variables should be supported with references and should be further explained

2.       Provide the source of data in table 1.

3.       The results and discussions should be further supported with references

4.       5. Conclusions and Policy Implications. I suggest to remove the sub headings conclusion, policy implication and merge the paragraphs

Author Response

Please check the attach file.

Author Response File: Author Response.pdf

Reviewer 2 Report

This is nice paper nicely framed and executed. I have some minor qualms with 

1. The length of the introduction which I feel is too long;

2. The formatting of the conclusion which should not have subsections

3. The English is at times rough and the editing in general not perfect.

The authors should have no problem addressing these concerns.

Author Response

Please check the attach file.

Author Response File: Author Response.pdf

Reviewer 3 Report

Dear authors

This study empirically analyses the impact of government environmental regulations on environmental investment in the heavy chemical industry in China, taking into account the distinction between private and public enterprises and the environmental level of the location. The results show that a negative statistical relationship exists between environmental regulations and environmental investment, and that this relationship remains negative for public enterprises, while it turns into a control for private enterprises. Moreover, it finds that this relationship is negative regardless of the environmental level of the location. The study adopts a rigorous empirical approach and its results are credible. However, minor revisions are required before recommending the study to the Editor-in-Chief for publication in the journal.

That revision is by citing theoretical papers analysing the impact of environmental policies on economic growth and environmental standards. By not only finding empirical results, but also citing the corresponding theoretical analysis of the empirical relationship, the generality and robustness of the results can be demonstrated. For example, on page 2, line 1, the authors state that "This is not only related to environmental quality, but also has some impact on public health [3] and human affective responses [4]". Here, Hamaguchi (2021a), who considers human capital in relation to education and health, shows a non-monotonic relationship between environmental policies and economic growth. In addition, the authors derive a hypothesis to be tested with the Porter hypothesis in mind, which considers environmental policy in an international economy where international competition occurs. Besides, the authors take into account the impact of the environmental level of the location on the environmental investment of firms. Therefore, the findings of Hamaguchi (2021b), who analyses the relationship between firm location and environmental levels in a global economy, may provide useful insights. Finally, the findings reveal that strict environmental regulations discourage environmental investment. This result suggests that the regulations lead to environmental degradation. Here, Grimaud (1999) and Ono (2002) found that environmental regulations lead to deterioration of environmental quality. Ono (2003) finds the growth-reducing effect of environmental tax. Citing these previous studies where needed would enhance the significance of this study.

 

Reference

1.       Grimaud, A. (1999). Pollution permits and sustainable growth in a Schumpeterian model. Journal of Environmental Economics and Management, 38(3), 249-266.

2.       Hamaguchi, Y. (2021a). Environmental policy and social status preference for education in an Uzawa–Lucas model. Bulletin of Economic Research, 73(3), 456-468.

3.       Hamaguchi, Y. (2021b). Polluting firms' location choices and pollution havens in an R&D-based growth model for an international emissions trading market. The Journal of International Trade & Economic Development, 30(4), 625-642.

4.       Ono, T. (2002). The effects of emission permits on growth and the environment. Environmental and Resource Economics, 21(1), 75-87.

5.       Ono, T. (2003). Environmental Tax Policy and Long‐Run Economic Growth. The Japanese Economic Review, 54(2), 203-217.

 

Sincerely.

Author Response

Please check the attach file.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

The quality of the paper is improved

Author Response

Please see the attachment.

Author Response File: Author Response.pdf