The Impact Of Environment Regulation On Firm Innovation

The "Porter Hypothesis" holds that the strict but flexible environmental regulation policies can promote enterprise innovation,and then enhance enterprise productivity and competitiveness so as to achieve a "win-win" situation between environment and economic development.Thus,the article combs the existing research results of the"Porter Hypothesis" and considers the impact of environmental regulation on the innovation of the enterprise from the microcosmic level Specifically,the patent data of China and the industrial enterprises database are merged from 1998 to 2007,and the number of the patent applications of industrial enterprises is used as a proxy for innovation for regression analysis.The results show that the enhancement of the intensity of environmental regulation does promote the innovation level of industrial enterprises in our country,but the promotion effect is heterogeneous.The reaction of industrial enterprises to environmental regulation is affected by the types of industry or ownershp and other enterprises characteristics.In terms of the robustness test,besides using the different agency variables of enterprise innovation and environmental regulation to verify the relationship between the two again,this paper also selects two specific policies of environmental regulation as a quasi-natural experiment,and uses the method of difference-in-differences to further confirm the role of environmental regulation in promoting enterprise innovation.Finally,this paper introduces interactive items to examine the impact of government subsidy and corporate replacement addresses on the process of environmental regulation promoting enterprise innovation.This paper finds that enterprises without government subsidy and without address change have more incentive to improve their own innovation in the face of strong environmental regulation.The empirical results in this paper provide the’ basis for the government to make strict but flexible environmental regulation to enhance the enterprise innovation,and then realize the "win-win"situation between environmental protection and technological progress or economic growth.