Environmental Regulations and Industrial Enterprises Innovation Strategy: Evidence from China. Issue 4 (16th March 2022)

• Record Type: Journal Article
• Authors: Li, Yuchen; Ma, Wenhao
• Is Part Of: Emerging markets finance & trade. Volume 58:Issue 4(2022)
• Page Start: 1147
• Page End: 1162
• Publication Date: 2022-03-16
• Subjects: Environmental regulation -- industrial enterprises -- innovation strategy -- Porter hypothesis; Balkan Peninsula -- Commerce -- Periodicals; Balkan Peninsula -- Foreign economic relations -- Periodicals; Europe, Central -- Commerce -- Periodicals; Europe, Central -- Foreign economic relations -- Periodicals; Europe, Eastern -- Commerce -- Periodicals; Europe, Eastern -- Foreign economic relations -- Periodicals; Turkey -- Commerce -- Periodicals; Turkey -- Foreign economic relations -- Periodicals; Asia -- Commerce -- Periodicals; Asia -- Foreign economic relations -- Periodicals; Eurasia -- Commerce -- Periodicals; Eurasia -- Foreign economic relations -- Periodicals; 382.05
• DOI: 10.1080/1540496X.2021.1963227
• Languages: English
• ISSNs: 1540-496X

Abstract

ABSTRACT: This study examines whether environmental regulations affect innovation strategy of industrial enterprises. We show that strict environmental regulations negatively impact the innovation strategy of industrial enterprises, which leads the firms to be conservative, suggesting that the Porter hypothesis is not realized at this stage. We further demonstrate that environmental regulations have a long-term negative impact on company innovation strategy. Our findings are robust to when adjusting innovation strategy metrics and estimation method. In addition, strict environmental regulations have a more significant negative impact on heavy pollution enterprise. Overall, our results provide clear policy implications by revealing that achieving a win-win situation between environmental protection and enterprise innovation in emerging markets remains a challenge.