Economic Policy Uncertainty, Environmental Regulation, and Green Innovation—An Empirical Study Based on Chinese High-Tech Enterprises

Abstract

As the continuous changes in environmental regulations have a non-negligible impact on the innovation activities of micro subjects, and economic policy uncertainty has become one of the important influencing factors to be considered in the development of enterprises. Therefore, based on the panel data of Chinese high-tech enterprises from 2012–2017, this paper explores the impact of heterogeneous environmental regulations on firms’ green innovation from the perspective of economic policy uncertainty as a moderating variable. The empirical results show that, first, market-incentivized environmental regulation instruments have an inverted U-shaped relationship with innovation output, while voluntary environmental regulation produces a significant positive impact. Second, the U-shaped relationship between market-based environmental regulation and innovation output becomes more pronounced when economic policy uncertainty is high. However, it plays a negative moderating role in regulating the relationship between voluntary-based environmental regulation and innovation output. This paper not only illustrates the process of technological innovation by revealing the intrinsic mechanism of environmental regulation on firm innovation, but also provides insights for government in environmental governance from the perspective of economic policy uncertainty as well.

Does the Environmental Regulation Intensity and ESG Performance Have a Substitution Effect on the Impact of Enterprise Green Innovation: Evidence from China

“…Lanoie took the Canadian manufacturing industry as an example and found that the long-term dynamic impact of environmental regulation on productivity was positive, but the short-term impact was negative [ 21 ]. According to Zhu et al, there is a relationship between market-incentive environmental regulation and green innovation in high-tech enterprises [ 28 ]. Some also hold the view that environmental regulation does not affect green innovation.…”

“…Referring to the practice of Zhu et al [ 28 ] and others, this study selects the number of green patent authorizations to measure green innovation (GIA) because green patent applications are not necessarily authorized. According to the definition of China’s Patent Law, invention patents focus on the technological innovation of products and methods, whereas utility models prefer the practical application of product shape and structure, which shows that invention patents are more effective in improving the level of technological innovation.…”

“…Referring to the research of Quan et al [ 24 ], Zhu et al [ 28 ] and Jiang et al [ 25 ], financial leverage (LEV), profitability (ROA), corporate value (TQ), growth ability (GRO), two duty unification (DUA), proportion of independent directors (PID), composite tax rate (CTR) and property rights (PRO) are selected as control variables.…”

Investigating the Relationship Between Entity Financialization, Managers’ Incentives, and Enterprise’s Innovation: Fresh Evidence From China

“…1 There is no doubt that hightech enterprises play an essential role in the Chinese economy (Liu et al, 2020). To furtherly promote economic transformation and development, the Chinese government has formulated a series of preferential measures to encourage enterprises to declare high-tech enterprises (Zhu Y. et al, 2021). Chinese high-tech enterprises refer to resident enterprises registered in China (excluding Hong Kong, Macao, and Taiwan) that continue to carry out research and development and transformation of technological innovations in the "high-tech industry" (Chen, 2011).…”

Research on Green Total Factor Productivity of Yangtze River Economic Belt Based on Environmental Regulation

“…On the other hand, the environmental carrying capacity of the YREB is very limited, and the economic development mode with high energy consumption, high pollution, and high emissions cause the continuous deterioration of the environmental situation. As a result, the Chinese government has to implement strict environmental regulation policies to curb environmental deterioration [3]. What influences will environmental regulation have on the economic development of the YREB?…”