Environmental regulation and firm eco-innovation: Evidence of moderating effects of fiscal decentralization and political competition from listed Chinese industrial companies. (10th January 2019)

• Record Type: Journal Article
• Authors: You, Daming; Zhang, Yang; Yuan, Baolong
• Is Part Of: Journal of cleaner production. Volume 207(2019)
• Page Start: 1072
• Page End: 1083
• Publication Date: 2019-01-10
• Subjects: Environmental regulation -- Eco-innovation -- Fiscal decentralization -- Political tournaments; Factory and trade waste -- Management -- Periodicals; Manufactures -- Environmental aspects -- Periodicals; Déchets industriels -- Gestion -- Périodiques; Usines -- Aspect de l'environnement -- Périodiques; 628.5
• DOI: 10.1016/j.jclepro.2018.10.106
• Languages: English
• ISSNs: 0959-6526

Abstract

Abstract: Promoting firms' eco-innovation through environmental regulation is of great significance to the sustainable development of China's economy. Based on the Porter Hypothesis, this paper used the panel data of 1962 listed Chinese industrial companies from 2004 to 2015 to empirically test the impact of environmental regulation on firm eco-innovation and the moderating effects of fiscal decentralization and political competition. The results showed that (1) without the influences of China's fiscal system and political promotion system, environmental regulation would likely significantly promote firms' eco-innovation as well as firms' eco-investment and eco-planning innovation. (2) Under the influence of China's fiscal decentralization system, environmental regulation has exerted a significant inhibitory impact on firms' eco-innovation as well as on firms' eco-investment and eco-planning innovation. (3) Under the influence of China's 'championship' system of political promotion, environmental regulation has exerted a significant inhibitory effect on firms' eco-innovation and on firms' eco-investment and eco-planning innovation. Finally, this paper provided detailed policy recommendations on how to optimize China's environmental regulatory policy system and how to promote firm eco-innovation. Highlights: This paper designed a web crawler in a Java programming language to collect data on firm eco-innovation. Eco-innovation was divided into eco-investment and eco-planning innovation. Fiscal decentralization negatively moderates the effect of environmental regulation on firm eco-innovation. Political competition negatively moderates the positive effect of environmental regulation on firm eco-innovation.