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Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections

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  • Jintao Zhang

    (Tongji University)

  • Zhen Yang

    (City University of Hong Kong)

  • Li Meng

    (Shandong Normal University)

  • Lu Han

    (Tongji University)

Abstract

The purpose of this paper is to investigate the nonlinear relationship between environmental regulations and enterprise innovation performance, as well as pay attention to the boundary condition of political connections. The data we applied in this paper are listed Chinese industrial firms during 2012–2017 to test the effect of environmental regulations on enterprises innovation performance, the moderating effect of political connections and the mediating effect of Research and Development (R&D) investments. The results show that (1) environmental regulations have a U-shaped relationship with enterprises innovation performance in which the R&D investments play a mediating role. (2) Political connections negatively moderate the relationship between environmental regulations and enterprises innovation performance via R&D investments. Except political connections’ moderating effect on the relationship between environmental regulations and R&D investments, (1) & (2) are demonstrated in a much more apparent manner among non-state-owned enterprises than that among state-owned enterprises. We also examined hypotheses among different regions of China in our studies.

Suggested Citation

  • Jintao Zhang & Zhen Yang & Li Meng & Lu Han, 2022. "Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 4088-4109, March.
    • Handle: RePEc:spr:endesu:v:24:y:2022:i:3:d:10.1007_s10668-021-01606-7
    DOI: 10.1007/s10668-021-01606-7
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    2. Luqi Yuan & Shihong Zeng, 2023. "An Empirical Study on the Impact of Green Credit on Financial Performance of China’s Listed Banks," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(2), pages 1-5.
    3. Wang, Zongrun & Fu, Haiqin & Ren, Xiaohang, 2023. "Political connections and corporate carbon emission: New evidence from Chinese industrial firms," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    4. Wang, Chao & Zhang, Yue-Jun, 2024. "Does environmental investment improve corporate productivity? Evidence from Chinese listed firms," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 398-409.
    5. Yiling Zhu & Tong Zhao, 2022. "Exploring the Role of Environmental Regulation and Technological Innovation in Financial Performance: Evidence from Chinese Heavy-Polluting Industry," Sustainability, MDPI, vol. 14(16), pages 1-18, August.

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