The green effects of competition: administrative monopoly regulation and green innovation

Abstract

In this study, we select A-share listed companies spanning from 2012 to 2022 as our sample. We utilize fair competition review system as a quasi-natural experiment to investigate the relationship between administrative monopoly regulation and green innovation. The results show that the administrative monopoly regulation is positively correlated with green innovation. The executives' environmental attention is the mechanism for both. Further analysis indicates that the promotional effect of administrative monopoly regulation on green innovation is more significant in firms that have been subjected to highly negative media coverage, firms located in regions with strong government environmental attention, heavily polluting firms, and state-owned firms. Our findings suggest that adequate market competition served as a significant stimulus for green innovation.