Green Innovations’ Differential Roles in Shaping Firm Productivity under Environmental Law via Optimized PSM-DID

Green Innovations’ Differential Roles in Shaping Firm Productivity under Environmental Law via Optimized PSM-DID | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Green Innovations’ Differential Roles in Shaping Firm Productivity under Environmental Law via Optimized PSM-DID Yi Jiang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6047515/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study utilizes both cross-sectional and year-by-year settings of Propensity Score Matching with Difference-in-Differences (PSM-DID) method to analyze the impact of the 2015 Environmental Protection Law (NEPL) on green innovations and total factor productivity in heavy polluting firms within manufacturing industries, spanning 2010–2018. Employing the Cobb-Douglas production function framework, it posits green innovation as a crucial technological resource augmenting tangible assets and technological productivity. The analysis reveals differentiated effects of NEPL on various types of green innovations: a negative impact on alternative energy and green transportation patents, while energy-saving and waste management patents remain largely unaffected. This suggests a crowding-out effect of environmental regulations on certain green innovations. Interestingly, heterogeneity analysis shows that smaller, less profitable heavy-polluting firms economically gain more from green innovations, particularly in waste management and energy-saving, while strict policies pose challenges for the alternative energy sector, highlighting the need for diverse, more supportive and adaptive policy approaches. PSM-DID Green innovation Total factor productivity mechanism analysis New Environmental Protection Law of China Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6047515","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":417649406,"identity":"88f6f88f-c7fc-47f3-aebc-0f63921d35e5","order_by":0,"name":"Yi Jiang","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABDElEQVRIiWNgGAWjYLCCBAY2HhB94EMFkGRmbiBaC+PBGWdAWhiJ0AIFzIc520A0AS267ccvv3hQwSfDP7v9wmHGebXR/O1ALT8qtuHUYnYmp8wi4Qwbj8SdMwWHC7cdz51xmLGBsefMbdxaDuSkGSS2Af1yIyfh8Mxtx3IbgFqYGdvwaDn/BqjlHxuPPEgL75xjufMJarmRfvhBYgMbj8GN9AOHeRtqcjcQ1vKGjSHhGBuP4Y0choMzjh3I3QjUchCvX86nP/74o+aYvdyN9McfPtTU5c47f/jggx8VuLUwMPCYSTAwHAMxDIDEYbDYATzqgYD98QcGhhoQ4wGQqMOveBSMglEwCkYkAAAML2hEaip7wwAAAABJRU5ErkJggg==","orcid":"","institution":"Nanjing Institute of Environmental Sciences","correspondingAuthor":true,"prefix":"","firstName":"Yi","middleName":"","lastName":"Jiang","suffix":""}],"badges":[],"createdAt":"2025-02-17 11:38:10","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6047515/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6047515/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":77030484,"identity":"2c79336b-c32c-417a-b20c-a6a8971dce22","added_by":"auto","created_at":"2025-02-24 12:17:11","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":3854816,"visible":true,"origin":"","legend":"","description":"","filename":"GreenInnovationsDifferentialRolesinShapingFirmProductivity.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6047515/v1_covered_e4b37f81-9f82-4c5b-8dfa-87b52d37274a.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Green Innovations’ Differential Roles in Shaping Firm Productivity under Environmental Law via Optimized PSM-DID","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"PSM-DID, Green innovation, Total factor productivity, mechanism analysis, New Environmental Protection Law of China","lastPublishedDoi":"10.21203/rs.3.rs-6047515/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6047515/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study utilizes both cross-sectional and year-by-year settings of Propensity Score Matching with Difference-in-Differences (PSM-DID) method to analyze the impact of the 2015 Environmental Protection Law (NEPL) on green innovations and total factor productivity in heavy polluting firms within manufacturing industries, spanning 2010\u0026ndash;2018. 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