Are Clean Technologies More Effective Than End-of-Pipe Technologies? Evidence from Chinese Manufacturing

An increasing number of manufacturing enterprises are adopting environmental technologies to cope with the increasingly severe environmental regulatory pressure, but the existing studies about the impact of environmental technologies on economic performance come up with mixed results. This paper contributes to the literature by using the financial constraints and market advantages as a dual mediating process in this relationship. An empirical test using a sample of Chinese manufacturing enterprises listed in the Shanghai and Shenzhen exchange from 2011 to 2018 is established. The results of regression analyses show that end-of-pipe technologies and clean technologies have a positive effect on firms' economic performance. Moreover, we find that clean technologies not only directly affect economic performance but also indirectly affect economic performance through mitigating financial constraints. With the negative influence of end-of-pipe technologies on market advantages, the positive economic effect caused by end-of-pipe technologies is weakened. This research provides useful insights into the selection of environmental technologies for manufacturing firms and the establishment of new policies to promote green finance and green consumption.