Environmental regulation, resource dependence, and innovation and entrepreneurship vitality of Chinese cites

Abstract

The effects of environmental regulation (ER) or resource dependence (RD) on innovation and entrepreneurship have received much attention. However, few studies systematically explore the relationship between ER, RD, and innovation and entrepreneurship within the same framework. This paper aspires to fill this gap in the literature. Using data of 274 Chinese prefecture-level cities from 2009 to 2020, we assess the effects of ER and RD on innovation and entrepreneurship vitality (IEV) through ordinary least squares model and panel threshold regression model. The results show that ER imposes a significant positive effect on IEV under relatively weak RD. Furthermore, ER imposes a significant negative effect on IEV under strong RD. The resource curse also exists in the field of urban innovation and entrepreneurship. Our findings have important implications for the government to implement differentiated ER policies and decrease the city's dependence on natural resources to better promote the development of urban innovation and entrepreneurship.