Journal
WATER POLICY
Volume 24, Issue 9, Pages 1497-1515Publisher
IWA PUBLISHING
DOI: 10.2166/wp.2022.055
Keywords
Corporate R&D activities; Environmental regulations; Inter-basin water transfer policies; South-north water transfer project; Water endowment
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Funding
- National Natural Science Foundation of China [72074119, 71774088]
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This study examines the unintended impact of inter-basin water transfer (IBWT) policies on corporate research and development (R&D) activities. Using the South-North Water Transfer Project in China as a quasi-natural experiment, the study finds that IBWT policies directly improve water resources and promote corporate R&D activities in water-receiving areas. Additionally, these policies indirectly encourage stronger environmental regulations, further stimulating R&D activities. The study also highlights the heterogeneity of the impact of IBWT policies on corporate R&D activities in water-receiving areas.
Inter-basin water transfer (IBWT) policies alter the spatial distribution of water endowments and trigger changes in environmental regulation policies, which may unintentionally impact the research and development (R&D) activities in IBWT water-receiving areas. However, the existing studies failed to examine the relationship between IBWT policies and corporate R&D activities, and lacked the exploration of the micro-mechanism of IBWT's unintended impact on corporate R&D activities. Through the water delivery of China's South-North Water Transfer Project as a quasi-natural experiment, this study adopts a difference-in-differences approach to scrutinise the unintended impact of IBWT policies on corporate R&D activities. The findings show that IBWT policies can make the water a 'resource blessing' by directly improving the water endowment in water-receiving areas, thereby promoting corporate R&D activities. In addition, IBWT policies can also indirectly encourage local governments in water-receiving areas to strengthen the intensity of environmental regulations, ultimately promoting companies to improve R&D activities. Finally, the impacts of IBWT policies on corporate R&D activities in water-receiving areas are heterogeneous. Overall, this study contributes to understanding the complicated relationship between IBWT policies and corporate R&D activities, and provides insights into how IBWT policies affect corporate R&D activities.
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