Environmental regulation and firm R&D manipulation behaviour: Evidence from the low-carbon city pilot program in China

Zhennan Sun and Qunyang Du

International Review of Economics & Finance, 2025, vol. 98, issue C

Abstract: With the increasing demand for a green economy and energy transition, firms, as the main players in the market, should focus on sustainable business models. The paper incorporates business strategy into a logical analytical framework to explore the impact of the LCCP program in China on firm R&D manipulation and related mechanisms. The findings indicate that the LCCP program significantly mitigates firm R&D manipulation. Moreover, the mitigating effect of the LCCP program has a more significant effect on R&D manipulation by private firms than by SOEs. The LCCP program, as a comprehensive environmental policy, effectively influences firm behaviour in sustainable business models. Our findings provide empirical evidence for policymakers.

Keywords: Firm R&D manipulation; LCCP program; Event study; China (search for similar items in EconPapers)
JEL-codes: G31 G32 Q58 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:98:y:2025:i:c:s1059056025000437

DOI: 10.1016/j.iref.2025.103880

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