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Direct and moderating effects of environmental regulation intensity on enterprise technological innovation: The case of China

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  • Xiguang Cao
  • Min Deng
  • Fei Song
  • Shihu Zhong
  • Junhao Zhu

Abstract

There is few significant attempt to integrate environmental regulation, government financial support, and corporate technological innovation in a methodological framework. Employing the data of the industrial enterprises with an annual turnover of over 20 million yuan from 30 Chinese provinces or municipalities between 2008 and 2016, this paper applies the fixed effect regression model to reveal the relationships between environmental regulation, government financial support, and corporate technological innovation simultaneously. Results show that: (1) there exists a U-shaped relation between environmental regulation intensity and technological innovation of enterprises which declines first and then climbs up, and China is still at the stage of inhibition before the “inflection point”. (2) government financial support does not significantly work on technological innovation directly, but environmental regulation drives this effect to be achieved; when the value of lnER is higher than 3.69, government financial support can significantly facilitate corporate technological innovation. (3) the comparison between regional samples reveals that heterogeneity exists in the influence of environmental regulation intensity and government financial support on corporate technological innovation. The threshold value of enabling effects of environmental regulation in eastern region is higher than that of the central and western region. These results remain consistent after we experiment several robustness checks. Theory and policy implications of our work are discussed.

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  • Xiguang Cao & Min Deng & Fei Song & Shihu Zhong & Junhao Zhu, 2019. "Direct and moderating effects of environmental regulation intensity on enterprise technological innovation: The case of China," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-20, October.
    • Handle: RePEc:plo:pone00:0223175
    DOI: 10.1371/journal.pone.0223175
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    2. Seunghwan Myeong & Michael J. Ahn & Younhee Kim & Shengli Chu & Woojong Suh, 2021. "Government Data Performance: The Roles of Technology, Government Capacity, and Globalization through the Effects of National Innovativeness," Sustainability, MDPI, vol. 13(22), pages 1-14, November.
    3. Huang, Jiacheng & Ma, Li, 2024. "Substantive green innovation or symbolic green innovation: The impact of fintech on corporate green innovation," Finance Research Letters, Elsevier, vol. 63(C).
    4. Liang Shen & Runjie Fan & Yuyan Wang & Zhaoqing Yu & Rongyun Tang, 2020. "Impacts of Environmental Regulation on the Green Transformation and Upgrading of Manufacturing Enterprises," IJERPH, MDPI, vol. 17(20), pages 1-14, October.
    5. Cong Li & Xihua Liu & Xue Bai & Muhammad Umar, 2020. "Financial Development and Environmental Regulations: The Two Pillars of Green Transformation in China," IJERPH, MDPI, vol. 17(24), pages 1-17, December.
    6. Chen, Dongxu & Huang, Yin & Tan, Nairong & Hong, Tao & Ma, Tao, 2024. "Cross-regional economic impact of carbon emission regulations: A quantitative spatial equilibrium model for China," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 438-462.
    7. Xiaowen Wang & Shuting Wang & Yunsheng Zhang, 2022. "The Impact of Environmental Regulation and Carbon Emissions on Green Technology Innovation from the Perspective of Spatial Interaction: Empirical Evidence from Urban Agglomeration in China," Sustainability, MDPI, vol. 14(9), pages 1-19, April.

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