Research On The Impact Of Environmental Regulation And Directors’ Liability Insurance On Corporate Green Technology Innovation

In recent years,the concept of green development has attracted much attention due to the growing conflict between the economy and the environment.The 20 th Party Congress Report and the 14 th Five-Year Plan both emphasize the importance of respecting nature,green water and green mountains,and prioritize ecological and green development,and green technology innovation is valued as an important tool to balance the economy and the environment.However,compared to general innovation activities,green technology innovation is more uncertain and requires high costs,long lead times and high risks.Therefore,corporate management may choose less risky investment projects over green innovation due to concerns,and this short-sighted behavior can hinder the long-term development and sustainability of the company.It is especially important to form an effective guidance mechanism to motivate and supervise enterprises to carry out green innovation.By reviewing the related literature at home and abroad,this paper takes formal environmental regulation(referred to as "formal regulation"),informal environmental regulation(referred to as "informal regulation"),and directors’ and officers’ liability insurance(referred to as "directors’ liability insurance")as key variables,and uses Porter’s hypothesis theory,technological innovation theory,principal-agent theory,and stakeholder theory to conduct an in-depth study on how to build a combined internal and external regulatory mechanism for green innovation."The key variables are Porter’s hypothesis,technological innovation theory,principal-agent theory,and stakeholder theory,which are used to study how to build an incentive and regulatory mechanism for internal and external corporate green innovation.The relationship between two types of environmental regulations(formal and informal),directors’ liability insurance and green technology innovation is empirically analyzed using a fixed-effects model with Shanghai and Shenzhen A-share listed manufacturing companies from 2012 to 2020;to ensure the reliability of the empirical results,the PSM propensity score matching method,alternative variables,and replacement models are used for robustness analysis;in addition,the types of green patents,the type of firm ownership,and firm location,for extended discussion.The results show that(1)formal regulation has a " U-shaped " relationship with green technology innovation,and its current strength is still relatively low,failing to effectively stimulate green innovation.Informal regulation has an inverted U-shaped relationship with green technology innovation,and its strength is currently at the rising stage of the curve,which can effectively promote green innovation;(2)the longer companies purchase directors’ liability insurance and the longer they purchase directors’ liability insurance,the more favorable it is for green innovation;(3)the directors’ liability insurance has a positive effect on the " U-shaped " curve of formal regulation and the " Ushaped " curve of informal regulation.U-shaped" curve of formal regulation and the "inverted U-shaped" curve of informal regulation;(4)different types of green innovation are influenced by environmental regulation.(4)Different types of green technology innovation are affected by environmental regulations.Formal regulations show a "U-shaped" curve for both green inventions and green utility model patents.Informal regulation has an "inverted U-shaped" effect on green invention patents in manufacturing industries,but has a suppressive effect on green utility model patents.The incentive effect of directors’ liability insurance on green invention patent innovation of manufacturing enterprises is stronger.For green invention patent innovation,directors’ liability insurance can positively regulate both formal and informal regulations.However,for green utility model innovation,the moderating effect of directorate insurance is statistically insignificant;(5)the relationship between formal and informal regulation and green innovation,as well as the moderating effect of directorate insurance,varies depending on the ownership structure and geographical location of firms.Based on the above conclusions,this paper makes the following recommendations.First,the government should improve environmental protection policies and adjust the penalties for corporate pollution according to regional differences.Develop appropriate environmental regulation policies for different enterprise needs and development stages,and focus on implementing policies that are flexible and targeted.The government and environmental protection agencies can strengthen public awareness of rational environmental protection by improving the public environmental monitoring and participation system;second,the government should improve the legislative work of directors’ liability insurance and strengthen the governance function of directors’ liability insurance.Third,enterprises should increase their investment in green innovation and optimize their production model to improve innovation efficiency.Actively respond to the public’s concerns and opinions on corporate environmental behavior in order to improve their social image and reputation.Actively introduce directors’ liability insurance to improve corporate governance mechanisms.