Abstract
Many developing countries including China are implementing increasingly stringent environmental regulations to achieve sustainable development. However, we have limited understanding about whether environmental regulations promote enterprise innovation. To address this research gap, this study empirically analyzes the impact of environmental regulations which is represented by the China Environmental Protection Law (2015) on enterprise innovation and it explores the moderating effects of official communication on environmental regulations and corporate innovation. The Super-Slacks-Based Measure (Super-SBM) model and Multiple Nonlinear Regression model are used to analyze 34,074 samples in China’s A-share market during the 2015–2017 period. Our results show that, in general, a higher intensity of environmental regulations is more beneficial to incentivize enterprises to implement innovation. Meanwhile, there is an inverted U-type relationship between official communication and innovation of enterprises. Furthermore, at present, the average level of official communication in China is too high, which will weaken the role of environmental regulation in promoting enterprise innovation. Overall, this study can help us better understand the politics behind enterprise innovation in countries.
Highlights
After reformation and opening, China’s economy has achieved world-renowned achievements
Based on the Factor Analysis method, we construct an evaluation index system for enterprise innovation through exploratory Factor Analysis of many indicators. irdly, from a macroperspective, we explore the main factors of enterprise innovation through two aspects of environmental regulations and official communication, which provides a novel way of further promoting enterprise innovation
Institution is the key to economic growth and plays a fundamental role in social and economic development, which can better explain the relationship between politics and economy [11]
Summary
Erefore, it is important to study the influencing factors of enterprise innovation. Technological innovation is the decisive factor to achieve the “win-win” goal of environmental protection and economic development, and the impact of environmental regulation on technological innovation has always been a hot research issue [4, 5]. Erefore, when the degree of official communication is different, the relationship between environmental regulation and enterprise innovation remains to be tested. Irdly, from a macroperspective, we explore the main factors of enterprise innovation through two aspects of environmental regulations and official communication, which provides a novel way of further promoting enterprise innovation. We further discuss the moderating effect of official communication on the relationship between environmental regulations and enterprise innovation. Of environmental regulation and official communication in promoting enterprise innovation
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