Impact of Environmental Regulation Intensity on Green Technology Innovation: From the Perspective of Political and Business Connections

Abstract

With heavy air pollution and the highest CO2 emissions in the world, China is in urgent need of technology innovation to improve the energy efficiency and control the pollution emission. This study empirically investigates the impact of environmental regulation intensity, political connections, and business connections on green technology innovation in China’s firms. The authors employ a panel data regression analysis on a dataset that comprises 884 observations for A-share listed companies from 2016 to 2019, owing to the availability of data. The results show: (1) Environmental regulation intensity (ERI) has a U-shaped effect on green technology innovation (GTI), which means GTI is inhibited by ERI in the early stage but gets promoted in the long run; (2) Political connections positively moderate the relationship between ERI and GTI mainly because of crowding-out effect and resource effect; (3) Business connections have a negative impact on the relationship between ERI and GTI, resulting from knowledge acquisition and lock-in; (4) Business connections have a greater moderating effect than political connections probably because political ties lack an effective mechanism to ensure long-term cooperation with the enterprises; (5) However, with regard to those firms in the non-heavily polluting industry, both connections moderate the relationship between ERI and GTI in an opposite direction to the main effect. The research results help policy makers formulate relevant policies, based on the impact of environmental regulation and social connections on green technology innovation.

Government Regulation, Executive Overconfidence, and Carbon Information Disclosure: Evidence From China

“…The existing research on government environmental regulation mainly focuses on the type, impacts, and effectiveness of environmental regulation (Ziegler et al, 2012;Cheng et al, 2017;Liu and Li, 2019). For example, existing studies have explored the effects of government regulation on firms' environmental performance (Akram et al, 2018;Lu, 2020;Wang et al, 2020), green technology innovation (Kammerer, 2009;Ai et al, 2021), sustainability, and corporate social responsibility strategies (Schmutz et al, 2020).…”

Tecnologias para o meio ambiente: definições e políticas regionais para o seu desenvolvimento

“…A abordagem dos Sistemas Nacionais de Inovação, por exemplo, reconhece a influência das políticas para as atividades de inovação Könnölä, 2010). O efeito da path dependence torna as empresas -especialmente as empresas poluidoras -dependentes e aprisionadas a um padrão tecnológico mais nocivo ao meio ambiente, pouco dispostas a adotar ou inovar seguindo um padrão alternativo (Ai;Peng Río;Xiong, 2021). Dessa forma, a intervenção do governo é necessária para os países abandonarem a dependência da trajetória vigente e se direcionarem para o desenvolvimento de um novo padrão tecnológico (Veugelers, 2012).…”

“…Na literatura, a inovação tecnológica é vista como uma importante ferramenta para resolver problemas graves de poluição e auxiliar na gestão ambiental, na redução de resíduos da indústria e na eficiência energética. Pode auxiliar a melhorar a utilização e alocação dos recursos naturais, promover a redução do uso de matéria-prima ou resultar em uma nova solução de material ou substância menos nocivos ao ecossistema (Ai;Peng;Xiong, 2021). Além do enfoque ambiental, pode ter efeitos transbordados para outros setores, contribuindo para o desempenho financeiro, para a competitividade empresarial, que tem potencial de melhorar o bem-estar social, gerando novas oportunidades de emprego.…”

Digital Economy, Environmental Regulation and Corporate Green Technology Innovation: Evidence from China

“…This is mainly because the development of the digital economy has boosted the advancement of environmental management technology. Advanced environmental management technology can effectively complete the integration and efficient use of environmental management information and can also strengthen the efficient supervision of related pollution activities in society [ 25 ]. Therefore, the development of the digital economy can effectively promote the effective improvement of environmental protection technology and help to strengthen the effect of environmental protection.…”