Environmental Regulations and Corporate Green Innovation in China: The Role of City Leaders’ Promotion Pressure

Abstract

China and other emerging market countries have suffered from the problem of environmental pollution while developing rapidly in the past few decades. In recent years, many countries have introduced strict environmental regulations in order to achieve sustainable development. This paper discusses the relationship between environmental regulations and corporate green innovation from the perspective of regional leaders’ promotion pressure. The empirical results show that direct policy regulation within the region stimulates green innovation on the part of enterprises, and the promotion pressure of city leaders has a further positive moderating effect on the positive correlation between environmental regulations and enterprises’ green innovation. The conclusion of the study proves that a strict environmental policy can promote the effectiveness of an environmental performance appraisal system in the sustainable development plans of cities and enterprises. This paper not only reveals the influence path of official promotion pressure on the sustainable development of enterprises in the administrative area from the micro perspective but also sheds some light that may improve government governance and promote the transformation of enterprises.

Global Value Chain Participation and Green Innovation: Evidence from Chinese Listed Firms

“…It provides detailed information of each listed firm’s financial, operating and corporate governance information, among others. This database has been widely used in previous studies regarding Chinese listed firms’ green innovation performance [ 26 , 27 ].…”

“…Following previous studies [ 26 , 27 ], we control a comprehensive set of variables that may affect the green innovation performance.…”

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

“…Sen (2015) [16] took the automotive industry in a transnational environment as the research object and studied the relationship between environmental regulation and technological innovation, and discovered that environmental regulation can not only improve the level of technological innovation, but also reduce environmental pollution. Yang et al (2021) [17] found that the strength of environmental regulation was positively related to firms' green innovation. Moreover, Calel (2011) [18], Bréchet and Meunier (2014) [19] believe that there is a non-linear relationship between environmental regulations and the degree of green technology innovation.…”

Ecological Civilization Demonstration Zone, Air Pollution Reduction, and Political Promotion Tournament in China: Empirical Evidence from a Quasi-Natural Experiment

“…However, since economic growth was placed in the primary position and the competition among local cadres was based on the economic performance, local governments tend to generally enforce environmental regulations with low standards to obtain mobility, which leads to extensive development at the expense of environmental pollution [17]. In particular, due to the characteristics of spatial spillover effect and regional heterogeneity for air pollution, the win of "blue sky defense war" still has a long way to go [18].…”

“…To vividly illustrate two different types of promotion logic, we draw Figure 1 as follows. In the past, the traditional guiding ideology of a political promotion tournament was "only GDP", that is, local cadres with better economic performance are more likely to be promoted while the opposite will face a lower promotion probability [16][17][18]. Since the announcement of ecological civilization, a new model of political promotion tournament was proposed and air pollution reduction (or environmental performance) had priority over economic growth, that is, only those who meet the environmental criteria firstly and achieve rapid economic growth simultaneously are more likely to be promoted [19][20][21][22][23].…”