The Dual Impacting Effects of Government Environmental Policies and Corporate Pollution Levels on Corporate R&D Investment

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

This paper conducts an in-depth study on how enterprises conduct R&D investment under the dual influence of government environmental policies and their own pollution levels. The topic holds significant practical relevance and academic value. In the context of increasingly severe global environmental issues, exploring the R&D investment behaviors of enterprises and the impacts of relevant policies is particularly urgent. The review comments are as follows:

1.In the introduction, the paper identifies the reasons for insufficient R&D investment in China; however, the definition of "information asymmetry" and its specific manifestations are not adequately clarified. It is suggested that the author briefly introduce the relevant theories of information asymmetry and explain how it specifically impacts the interactions between enterprises and the government in the R&D investment process to enhance readers' understanding.

2.When discussing the incentive effects and crowding-out effects of government subsidies, it is recommended that the author analyze the interplay between the two in more detail. For instance, is there a balance point at which the incentive effect might outweigh the crowding-out effect, or vice versa? Based on this, theoretical or empirical hypotheses could be proposed to support subsequent empirical analysis.

3.In discussing the impact of corporate pollution levels on R&D investment, some descriptions seem to lack direct connections. It is suggested that the author clarify how pollution levels influence corporate R&D decisions through specific mechanisms, such as the presence of cost concerns, risk considerations, or public image factors. Additionally, specific hypotheses or models could be proposed to describe this relationship to enhance theoretical depth.

4.In the discussion section, the commentary on the limitations of the model is beneficial, but it is recommended that the author further explore how future research could utilize other methods or data to address these limitations, going beyond just information asymmetry issues. Considerations could be given to how to conduct broader research from different industry or market perspectives, such as pharmaceuticals or agriculture

 

 

Author Response

Reviewer 1

This paper conducts an in-depth study on how enterprises conduct R&D investment under the dual influence of government environmental policies and their own pollution levels. The topic holds significant practical relevance and academic value. In the context of increasingly severe global environmental issues, exploring the R&D investment behaviors of enterprises and the impacts of relevant policies is particularly urgent. The review comments are as follows:

Q1: In the introduction, the paper identifies the reasons for insufficient R&D investment in China; however, the definition of "information asymmetry" and its specific manifestations are not adequately clarified. It is suggested that the author briefly introduce the relevant theories of information asymmetry and explain how it specifically impacts the interactions between enterprises and the government in the R&D investment process to enhance readers' understanding.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we agree with this good suggestion, and remove the part of the definition of "information asymmetry", and we also rewrite the part of “Introduction”.

 

Q2: When discussing the incentive effects and crowding-out effects of government subsidies, it is recommended that the author analyze the interplay between the two in more detail. For instance, is there a balance point at which the incentive effect might outweigh the crowding-out effect, or vice versa? Based on this, theoretical or empirical hypotheses could be proposed to support subsequent empirical analysis.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion, and we rewrite the part of “Government Environmental Policy Constraints and Enterprise R&D Investment (from the perspective of the government)”.

Q3: In discussing the impact of corporate pollution levels on R&D investment, some descriptions seem to lack direct connections. It is suggested that the author clarify how pollution levels influence corporate R&D decisions through specific mechanisms, such as the presence of cost concerns, risk considerations, or public image factors. Additionally, specific hypotheses or models could be proposed to describe this relationship to enhance theoretical depth.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion, and we rewrite the research hypotheses.

 

Q4: In the discussion section, the commentary on the limitations of the model is beneficial, but it is recommended that the author further explore how future research could utilize other methods or data to address these limitations, going beyond just information asymmetry issues. Considerations could be given to how to conduct broader research from different industry or market perspectives, such as pharmaceuticals or agriculture.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take these good suggestions, and we add a new part of "6.3 Limitations and future research". The limitations of the study include three aspects: single research method; limited data sources; incomplete industry coverage. he future research recommendations include the following three aspects: enriching research methods; expand data sources; expand the scope of industry research.

Reviewer 2 Report

Comments and Suggestions for Authors

In this paper, authors employed bilateral random frontier model to analyze the influence level and determining factors over R&D investment by government and market enterprises. One major conclusion drew by this work is that enterprises have a greater influence than the government. Three hypotheses were made and proved using Maximum Likelihood Estimation, Ordinary Least Squares Model and others with various factors, using data from China Industrial Enterprise Database and China Industrial Enterprise Pollution Emissions Database.

A major concern is that comprehensive environment monitoring data is missing, which is available in environment agencies at different levels of government. It is crucial to verify the results.

In addition, suggestions are:

1.        Some symbols in section 3.1.2 formula are not displayed properly.

2.        The applicability of the mathematical models for this research question should be analyzed.

3.        It needs detailed elaboration about the argument “unilateral distribution characteristics …. ….. obey exponential distribution”.

4.        It is necessary to give representations of probability density function and cumulative distribution function for ψφ, even there follow standard normal distribution.

5.        Repetitive paragraphs in section 5.

 

Comments on the Quality of English Language

generally fine. the text can be more concise and accurate.

Author Response

Reviewer 2

In this paper, authors employed bilateral random frontier model to analyze the influence level and determining factors over R&D investment by government and market enterprises. One major conclusion drew by this work is that enterprises have a greater influence than the government. Three hypotheses were made and proved using Maximum Likelihood Estimation, Ordinary Least Squares Model and others with various factors, using data from China Industrial Enterprise Database and China Industrial Enterprise Pollution Emissions Database.

Q1: A major concern is that comprehensive environment monitoring data is missing, which is available in environment agencies at different levels of government. It is crucial to verify the results.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: This article used micro matching data from the China Industrial Enterprise Database and the China Industrial Enterprise Pollution Database to compile 21770 sample data covering 31 provinces (cities) across the country. And we take this good suggestion in the part of “6.3. Limitations and future research”.

 

In addition, suggestions are:

Q2: Some symbols in section 3.1.2 formula are not displayed properly.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion, and check on all the formulas in the right displayed properly.

 

Q3: The applicability of the mathematical models for this research question should be analyzed.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this suggestion and we rewrite the part of "Logical Deduction and Model Setting ", including "3.1.1. Benchmark model for remaining R&D investment", "3.1.2. Estimation method for remaining R&D investment", “3.1.3. Deduction of the residual R&D investment for both government and enterprises”， “3.1.4. Government and business jointly establish the model for obtaining the remain-ing R&D investment”.

 

Q4: It needs detailed elaboration about the argument “unilateral distribution characteristics …. ….. obey exponential distribution”.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we make the detailed elaboration of the “unilateral distribution characteristics …. obey exponential distribution” into “In order to estimate the surplus and parameters seized by both the governments and enterprises, the Maximum Likelihood Estimation (MLE) method is selected for estimation. The study assumesandthat X follows an exponential distribution,Obeys normal distribution,, andare mutual independence, composite disturbance termprobability density function is:”.

 

Q5: It is necessary to give representations of probability density function and cumulative distribution function for ψφ, even there follow standard normal distribution.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion, and we describe the It is necessary to give representations of probability density function and cumulative distribution function for ψφ, even there follow standard normal distribution.

 

Q6: Repetitive paragraphs in section 5.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion; this part is the "Section 5" in the last version. We check on this section, and rewrite this section again.

Reviewer 3 Report

Comments and Suggestions for Authors

The paper addresses a critical issue—how government environmental policies and corporate pollution levels influence R&D investment based on the China Industrial Enterprise Database and the Pollution Emissions Database.

1. There is only one figure in this paper. The statistical presentation, while rigorous, is dense and may be inaccessible to readers not well-versed in econometrics or stochastic modeling.  The authors can try to make use of more intuitive visualizations such as bar graphs, heatmaps, or infographics to convey the impact of variables like pollution levels, subsidies, and ownership structures on R&D investments. 

2. The paper includes some redundant discussions, particularly in the theoretical background and hypothesis sections, which may dilute its impact.

3. The abstract and conclusion sections are overly detailed and dense, which may detract from the key takeaways.

Author Response

Reviewer 3

The paper addresses a critical issue—how government environmental policies and corporate pollution levels influence R&D investment based on the China Industrial Enterprise Database and the Pollution Emissions Database.

Q1: There is only one figure in this paper. The statistical presentation, while rigorous, is dense and may be inaccessible to readers not well-versed in econometrics or stochastic modeling. The authors can try to make use of more intuitive visualizations such as bar graphs, heatmaps, or infographics to convey the impact of variables like pollution levels, subsidies, and ownership structures on R&D investments. 

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion, and we add a new figure 1 “The figure of the theoretical mechanism”.

 

Q2: The paper includes some redundant discussions, particularly in the theoretical background and hypothesis sections, which may dilute its impact.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we delete the redundant discussions, and rewrite the parts of "Government Environmental Policy Constraints and Enterprise R&D Investment (from the perspective of the government)", "The relationship between the level of pollution and R&D investment of the enterprises (from the perspective of the enterprises) ", and the part of "2.3 Research Hypotheses”.

 

Q3: The abstract and conclusion sections are overly detailed and dense, which may detract from the key takeaways.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we take this good suggestion, and make the abstract shorter and clear. We simplified the parts of “6.1. Conclusion” and “6.2. Implications”.

Reviewer 4 Report

Comments and Suggestions for Authors

Dear Authors

I received the papr titled: Passive "Adaptation" or Active "Change-Seeking": The Dual Impact Effects of Government Environmental Policies and Corporate Pollution Levels on Corporate R&D Investment. The title does not reflect the content of the presented text. The work requires supplementation related to adaptation.

Line 311 – subtitle “Both the government and the enterprises obtain the benchmark model for surplus 311 of R&D investment”. Please change it, as it is not suitable as a title in this form.

Line 419 – similar comments to the subtitle: ” Government and business jointly establish the model for obtaining the remaining R&D investment”. This type of sentence is not appropriate for chapter or subchapter titles.

Line 465 -This is incorrect: China Industrial Enterprise Database and China Industrial Enterprise Pollution Emissions Database provided the data used in this study (Cai and Liu, 2010; Brandt, et al., 2017). If Authors cite Reports, citations should be from original sources, not secondary sources. Please cite original reports. Where official institutional reports and industry studies are available, it is important to rely on original, credible sources, as they provide the most accurate and up-to-date information. Using primary sources allows for a more thorough understanding of the context of the study and provides greater credibility to the results. Relying on secondary sources can reduce the value of the research, as such studies may contain interpretations or distortions that distance us from the real picture. Furthermore, by using original sources, the authors of the studies increase the transparency of their analyses, which allows other researchers and stakeholders to verify the data and the repeatability of the results, which is the basis for solid and reliable scientific work.

The authors included passive adaptation and active check seeking in the title, but I found no explanation of these terms throughout the paper. The title is not appropriate for the content. I request that the authors familiarize themselves with the concept of adaptation, understand the distinction between active and passive adaptation, and incorporate this into their work.

Please read some scientific papers concerning adaptation: Adaptation strategy on regulated markets… or ….the development strategies of energy enterprises.

I also ask that they avoid mixing separate sections, such as the discussion with the conclusion.

Please make citation according to mdpi requiremnents.

Author Response

Reviewer 4

Dear Authors

I received the paper titled: Passive "Adaptation" or Active "Change-Seeking": The Dual Impact Effects of Government Environmental Policies and Corporate Pollution Levels on Corporate R&D Investment. The title does not reflect the content of the presented text. The work requires supplementation related to adaptation.

Response: we change the title from "Passive "Adaptation" or Active "Change-Seeking": The Dual Impact Effects of Government Environmental Policies and Corporate Pollution Levels on Corporate R&D Investment" into "The Dual Impacting Effects of Government Environmental Policies and Corporate Pollution Levels on Corporate R&D Investment".

Q1: Line 311 – subtitle “Both the government and the enterprises obtain the benchmark model for surplus 311 of R&D investment”. Please change it, as it is not suitable as a title in this form. Line 419 – similar comments to the subtitle: ” Government and business jointly establish the model for obtaining the remaining R&D investment”. This type of sentence is not appropriate for chapter or subchapter titles.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we change the subtitle 3.1.1 “Both the government and the enterprises obtain the benchmark model for surplus of R&D investment” into “Benchmark model for remaining R&D investment”. We change subtitle 3.1.2 “Government and business jointly establish the model for obtaining the remaining R&D investment” into “Estimation method for remaining R&D investment”.

 

Q2: Line 465 -This is incorrect: China Industrial Enterprise Database and China Industrial Enterprise Pollution Emissions Database provided the data used in this study (Cai and Liu, 2010; Brandt, et al., 2017). If Authors cite Reports, citations should be from original sources, not secondary sources. Please cite original reports. Where official institutional reports and industry studies are available, it is important to rely on original, credible sources, as they provide the most accurate and up-to-date information. Using primary sources allows for a more thorough understanding of the context of the study and provides greater credibility to the results. Relying on secondary sources can reduce the value of the research, as such studies may contain interpretations or distortions that distance us from the real picture. Furthermore, by using original sources, the authors of the studies increase the transparency of their analyses, which allows other researchers and stakeholders to verify the data and the repeatability of the results, which is the basis for solid and reliable scientific work.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: It is incorrect citation, and we remove the "(Cai and Liu, 2010; Brandt, et al., 2017) from here."

 

Q3: The authors included passive adaptation and active check seeking in the title, but I found no explanation of these terms throughout the paper. The title is not appropriate for the content. I request that the authors familiarize themselves with the concept of adaptation, understand the distinction between active and passive adaptation, and incorporate this into their work.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: We take this suggestion, and we remove the Passive "Adaptation" or Active "Change-Seeking".

 

Q4: Please read some scientific papers concerning adaptation: Adaptation strategy on regulated markets… or .the development strategies of energy enterprises.

I also ask that they avoid mixing separate sections, such as the discussion with the conclusion. Please make citation according to mdpi requiremnents.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: in order to avoid mixing separate sections, we take the "discussion" as the separate section of "5. Discussion".

We take this good suggestion, and change the fomat of the citations and reference according to the MDPI.

Reviewer 5 Report

Comments and Suggestions for Authors

1.The Introduction section needs more  content of literature reviews in order to better propose the research questions of this manuscript.

2. Line 358, the “R&” should be “R&D”. Please check all other parts of the manuscript to correct similar careless mistake.

3. Lines 383 to 387 contain some garbled characters and repeated variables. Please carefully review this section and other parts of the manuscript to ensure the accuracy and correctness of the model, variables, and their explanations.

4.On Page 17, Figure 1 is missing important elements. The meanings represented by the three figures are not labeled in the figure itself. Please add the necessary annotations, otherwise, based on the corresponding text description (lines 559 to 566), it is impossible to determine which subject's profit distribution each figure specifically refers to.

5. It is recommended to place the Discussion section before the Conclusion. In addition, it is suggested to supplement the Discussion section with relevant literature, focusing on discussing the results. The current Discussion section mainly talks about the shortcomings of the manuscript and future research trends.

Author Response

Reviewer 5

Q1: The Introduction section needs more content of literature reviews in order to better propose the research questions of this manuscript.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: We add some new articles and contents from the current literatures, and rewrite the whole part of "Introductions".

 

Q2: Line 358, the “R&” should be “R&D”. Please check all other parts of the manuscript to correct similar careless mistake.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we have changed the “R&” into “R&D”.

 

Q3: Lines 383 to 387 contain some garbled characters and repeated variables. Please carefully review this section and other parts of the manuscript to ensure the accuracy and correctness of the model, variables, and their explanations.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: We checked on the garbled characters and repeated variables; we also checked on the spellings. We add three new models as follows: Mdel (1), Model (2) and Model (3).

 

Q4: On Page 17, Figure 1 is missing important elements. The meanings represented by the three figures are not labeled in the figure itself. Please add the necessary annotations, otherwise, based on the corresponding text description (lines 559 to 566), it is impossible to determine which subject's profit distribution each figure specifically refers to.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: Thanks for the good suggestion, and we draw the figures again, and we change the “Figure 1” into “Figure 2”.

 

Q5: It is recommended to place the Discussion section before the Conclusion. In addition, it is suggested to supplement the Discussion section with relevant literature, focusing on discussing the results. The current Discussion section mainly talks about the shortcomings of the manuscript and future research trends.

Response: Thanks for the good suggestion, and we take this opinion. We made the modifications as follows: we add three new paragraphs to state the discussion of this study. The first paragraph describes the aims of the study.

The second paragraph describes the findings of this article, which divided on (1) there exists a degree of influence between the government and market enterprises, (2) the degree of influence varies between the government and market enterprises at different stages of economic development, (3) the influence between the government and market enterprises differs across administrative regions, (4) the influence of both the government and market enterprises is affected by subsidy factors, (5) the influence of both entities is also determined by the ownership structure of enterprises, (6) the influence of both government and market enterprises is related to enterprise size and (7) the influence of both the government and market enterprises is also linked to the age of the enterprises.

The third paragraph is about the primary contributions of this study are as follows: (1) Innovation in modeling and measurement of information asymmetry; (2) Development of a multidimensional analytical framework; (3) Systematic identification of decisive factors; (4) New insights into the roles of government and market enterprises.

Round 2

Reviewer 2 Report

Comments and Suggestions for Authors

The authors did not make meaningful efforts to my review and proper responses in the revised version.

To my major concern, citing carbon emissions and pollution and other related statistical data published by some of another government agency is necessary to validate the models in this work. And it is not a hard addon. Is it interesting by saying ”we take this good suggestion”, but immediately saying “in the part of 6.3. Limitations and future research”?

Again to my third question, the authors replied “we take this suggestion and we rewrite ….”. But there are no major revisions at all. What is the reason that some unchanged texts are highlighted in red?

Author Response

Q1: The authors did not make meaningful efforts to my review and proper responses in the revised version.

To my major concern, citing carbon emissions and pollution and other related statistical data published by some of another government agency is necessary to validate the models in this work. And it is not a hard addon. Is it interesting by saying ”we take this good suggestion”, but immediately saying “in the part of 6.3. Limitations and future research”?

Reply: Sorry for the misunderstanding in the first round, and Thanks for the good suggestion. The author accepted this modification suggestion and explained China's carbon emissions issue by searching for relevant environmental monitoring agencies and data platforms to obtain relevant data. Firstly, according to the 2018 Development Report on the Accounting of China's Economic Ecological Gross Domestic Product, the losses and costs incurred by China ten years ago due to environmental pollution amounted to 2 trillion yuan. Secondly, we searched for relevant discussions on the continuous improvement of the Holy Eucharist environment in China in the recent 2024 China Ecological Environment Status Bulletin. Once again, we searched for the global carbon monitoring platform (www.carbonmonitor. org.) and conducted a statistical analysis of China's annual carbon emissions from 2019 to 2024. We also classified the carbon emissions of six sectors (ground transport, industry, residential, domestic aviation, international aviation, power) and found the importance of government policies from the data display, providing practical support for the research questions in this article.

 

Q2: Again to my third question, the authors replied “we take this suggestion and we rewrite ….”. But there are no major revisions at all. What is the reason that some unchanged texts are highlighted in red? (It needs detailed elaboration about the argument “unilateral distribution characteristics …. ….. obey exponential distribution”.)

Response: we take this suggestion. We make some change on the part of "Estimation method for remaining R&D investment". As for the argument “unilateral distribution characteristics …. obey exponential distribution”, it is the assumption according to the Maximum Likelihood Estimation (MLE) method. We also describe some details about the function here.

Reviewer 3 Report

Comments and Suggestions for Authors

In my previous comment, I noted that the paper contains only one figure. What I meant to emphasize is that presenting the research data using various formats—such as tables, charts, and figures—can significantly enhance the paper’s clarity and impact. 

Author Response

Question: In my previous comment, I noted that the paper contains only one figure. What I meant to emphasize is that presenting the research data using various formats—such as tables, charts, and figures—can significantly enhance the paper’s clarity and impact. 

Response: we take this suggestion and we use some charts to describe the Table 2 (such as figure 2. Figure 3. and figure 4. in page 12). However, as for other tables, it is difficult to use figures to state, please understand us.

Additionally, we take this suggestion. We accessed the global carbon monitoring platform (www.carbonmonitor.org) and analyzed China’s annual carbon emissions from 2019 to 2024. Additionally, we categorized the carbon emissions into six sectors: ground transport, industry, residential, domestic aviation, international aviation, and power, and we draw two figures. Our analysis revealed the significant impact of government policies, providing practical insights into the research questions posed in this article.

Reviewer 4 Report

Comments and Suggestions for Authors

I have read the new version of the article, which has been thoroughly revised in terms of both content and style. In my opinion, the current version presents itself as a fully valuable scientific text. The authors have addressed all the key comments raised in the previous review, which has significantly improved the quality of the manuscript.

I am also pleased that the title has been changed— it is now appropriate to the content of the article and aligns with academic publication standards. I believe that in its current form, the article can be accepted for publication.

Author Response

I have read the new version of the article, which has been thoroughly revised in terms of both content and style. In my opinion, the current version presents itself as a fully valuable scientific text. The authors have addressed all the key comments raised in the previous review, which has significantly improved the quality of the manuscript.

I am also pleased that the title has been changed— it is now appropriate to the content of the article and aligns with academic publication standards. I believe that in its current form, the article can be accepted for publication.

Response: Thanks for your approvement and acceptance for publication suggestion! We will take efforts for it, thanks!