Fostering sustainability: unveiling the impact of Internet development on carbon emissions in China.

The rapid development of the Internet has significantly impacted various socio-economic activities. Using Chinese Industrial Enterprise database and Industrial Enterprise Pollution database, this research examines the impact and mechanisms of Internet development on CO2 emissions. The key findings are as follows: (1) Internet development has substantially reduced the CO2 intensity of enterprises, and this conclusion remains robust even after performing a series of robustness analyses. (2) The major mechanisms responsible for the reduction in CO2 emissions are productivity improvement, technological innovation, and energy structure adjustment. (3) The analysis of heterogeneity reveals that the effect of Internet development on CO2 reduction is more pronounced in coastal areas, areas with a high share of secondary industry, low-carbon industries, clean industries, small-scale enterprises, and export enterprises. This study provides empirical evidence supporting China's "Internet+" strategy and its progress towards achieving the "Carbon Peaking and Carbon Neutrality Goals."

The impact of environmental regulation on foreign firms' exit: from the perspective of competition.

Most of the existing studies on the pollution haven hypothesis focus on the foreign direct investment (FDI) inflow, ignoring the divestment of FDI and the role of competition. Based on Chinese firm-level data, we investigate the relationship between environmental regulation (ER) and the exit of foreign firms from China. The results indicate that ER does not cause foreign firms to leave China, but rather reduces the probability of foreign firms exiting China. This effect is present in eastern China and the medium-polluting industries. We innovatively explore the underlying mechanisms from the perspective of firm competition and market competition environment. Firm competition mechanism finds that ER promotes foreign firms' business performance (market share, profits, and productivity) but undermines the domestic firms' business performance, thus reducing the probability of foreign firms leaving. Furthermore, the market competition environment plays a positive moderating effect. ER has a greater role in reducing the probability of foreign firms' exit when regions have higher market competition. Our findings offer a basis for the Chinese government to formulate environmental protection policies and provide experience for other developing countries.