Environmental regulation and green innovation: Evidence from heavily polluting firms in China

Mengmeng Guo, Huixin Wang and Yicheng Kuai

Finance Research Letters, 2023, vol. 53, issue C

Abstract: This study examines the effect of environmental regulation on firms’ green innovation, as well as the heterogeneous effects among different firms. Using the sample of A-share listed firms in the heavy-polluting industry in China and the manually collected government-implemented environmental regulation from 2006 to 2018, we find strong evidence that environmental regulation has a significantly positive effect on firms’ green innovation. Further, our results show that environmental regulation has a more prominent effect on firms with poorer internal and external governance. In addition to promoting firm green innovation, environmental policies can benefit firms’ long-term development as well.

Keywords: Environmental regulation; Green innovation; Internal governance; External governance (search for similar items in EconPapers)
JEL-codes: G38 O32 Q58 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612322008005

DOI: 10.1016/j.frl.2022.103624

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