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

Xinglian Peng () and Weihui Hu
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Xinglian Peng: Department of Finance and Economics, Nanchang University College of Science and Technology, Jiujiang 332020, China
Weihui Hu: Economics Department, College of Economics and Management, Nanchang University, Nanchang 330031, China

Sustainability, 2025, vol. 17, issue 13, 1-27

Abstract: Against the backdrop of increasingly severe global environmental issues, the manner in which enterprises conduct R&D investment, influenced by both government environmental policies and their own pollution levels, has become a prominent research topic. This paper employs the bilateral random frontier model of information game (SFA2tier) to analyze the influence levels and determining factors of government and market enterprises. The findings reveal that enterprises exert a stronger influence than the government, with the latter able to enhance R&D investment by 5.50% through its own influence. The disparity in influence levels between government and enterprises regarding R&D investment is significant and varies according to regional economic development levels and administrative hierarchies. Key determining factors include government subsidies, the nature of enterprise ownership, and enterprise size. The research results not only enrich relevant theories concerning the relationship between environmental policies and enterprise R&D investment but also provide valuable insights for the government to formulate more effective environmental policies and for enterprises to develop R&D strategies.

Keywords: information asymmetry; enterprise R&D investment; bilateral random frontier model; environmental policy; enterprise pollution level (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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