Abstract
There is few significant attempt to integrate environmental regulation, government financial support, and corporate technological innovation in a methodological framework. Employing the data of the industrial enterprises with an annual turnover of over 20 million yuan from 30 Chinese provinces or municipalities between 2008 and 2016, this paper applies the fixed effect regression model to reveal the relationships between environmental regulation, government financial support, and corporate technological innovation simultaneously. Results show that: (1) there exists a U-shaped relation between environmental regulation intensity and technological innovation of enterprises which declines first and then climbs up, and China is still at the stage of inhibition before the "inflection point". (2) government financial support does not significantly work on technological innovation directly, but environmental regulation drives this effect to be achieved; when the value of lnER is higher than 3.69, government financial support can significantly facilitate corporate technological innovation. (3) the comparison between regional samples reveals that heterogeneity exists in the influence of environmental regulation intensity and government financial support on corporate technological innovation. The threshold value of enabling effects of environmental regulation in eastern region is higher than that of the central and western region. These results remain consistent after we experiment several robustness checks. Theory and policy implications of our work are discussed.
Highlights
China’s economy sustained high-speed growth as industrialization and urbanization in the country advanced by leapfrog
The industrial enterprises with an annual turnover of over 20 million yuan from 30 Chinese provinces or municipalities (Tibet is excluded as its data are not complete) between 2008 and 2016 were adopted in this paper to conduct the empirical study to contribute to extant literature in the following three aspects: first, government financial support is incorporated into the model as an important factor in the choice of the corporate technological innovation strategy, and the direct and moderating effects of environmental regulation intensity on enterprise technological innovation is Direct and moderating effects of environmental regulation intensity on enterprise technological innovation examined simultaneously
Based on the above research status, we find that it is generally accepted that environmental regulation and government financial support do affect enterprise technological innovation, whereas there is no reasonable and unified explanation of the influence directions and degrees of environmental regulation and government financial support on corporate technological innovation [33,34,35]
Summary
China’s economy sustained high-speed growth as industrialization and urbanization in the country advanced by leapfrog. Some researchers adopt a dynamic angle and prove the possibility of a win-win scenario between environmental regulation and improvements on technological innovation [10,11] They point out that properly crafted environmental regulation can induce, under dynamic constrains, enterprises to improve resource allocation efficiency and technology and trigger “innovation offsets” so as to partially or even fully offset the costs of complying with them. The industrial enterprises with an annual turnover of over 20 million yuan from 30 Chinese provinces or municipalities (Tibet is excluded as its data are not complete) between 2008 and 2016 were adopted in this paper to conduct the empirical study to contribute to extant literature in the following three aspects: first, government financial support is incorporated into the model as an important factor in the choice of the corporate technological innovation strategy, and the direct and moderating effects of environmental regulation intensity on enterprise technological innovation is. The authors examine whether a regional heterogeneity exists due to regional differences in environmental regulation intensity and government financial support level
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