Environmental Regulation, R&D Innovation And Corporate Competitiveness

In recent years,the government's emphasis on environmental protection has been continuously strengthened,and a series of environmental protection policies have been introduced.In this context,many studies have focused on the impact of environmental regulation on corporate competitiveness and discussed the relationship between environmental protection and economic development.The "Porter Hypothesis" believes that properly designed environmental regulations has an incentive effect on enterprise innovation,and the resulting "innovation offsetting" effect may exceed the "compliance costs" of enterprises and promote corporate competitiveness.The "Porter Hypothesis" can be divided into strong and weak versions according to its different connotations.The weak "Porter Hypothesis" discusses the relationship between environmental regulation and innovation.The strong "Porter Hypothesis" focuses on the impact of environmental regulation on the productivity of enterprises.The empirical study of the "Porter Hypothesis" is the key to answering whether the environmental quality and enterprise development can achieve "win-win".This paper uses the sample of listed companies in the Shanghai and Shenzhen stock markets from 2012 to 2017.The ratio of industrial pollution control investment to industrial sales value in the province where the company is located is used as an indicator of the intensity of environmental regulation,and the research and development investment and innovation of environmental regulation on enterprises are discussed.The effects of output and labor productivity were tested on the strong and weak versions of the Porter Hypothesis.In addition,through the use of the extended CDM model,the company's R&D innovation process and production process are integrated into a unified framework.This paper also discusses the role of environmental regulation through the role of the company's R&D process to influence productivity,and establishes the link between strong and weak hypothesis.The results of this paper show that: First,the "Porter Hypothesis" is established in the current context of China.Environmental regulation has a significant role in promoting R&D and innovation of enterprises,and the promotion of corporate productivity is very significant in the long run.Second,a large part of the overall impact of environmental regulation on the competitiveness of enterprises works indirectly through the process of influencing the R&D and innovation of enterprises.Third,the impact of environmental regulation on enterprises has nonlinear characteristics.This paper finds a clear inverse “U-Shape” relationship between the intensity of environmental regulation and the level of R&D investment and labor productivity.In addition,the direct impact of environmental regulation on the innovation output of enterprises appears to be suppress at first and promote at last.Fourth,there are regional differences in the impact of environmental regulation on companies.Compared with enterprises in the central and western regions,environmental regulation has a stronger stimulating effect on R&D investment of enterprises in the eastern region,a greater “crowding-out” effect on innovation output,and a more pronounced promoting effect on labor productivity.Based on the results of empirical research,this paper gives four policy recommendations: First,China should adhere to the innovation-driven development path and vigorously support enterprise R&D and innovation.Second,the government should uphold the principle of appropriateness in the formulation of environmental protection policies to avoid blindly increasing the intensity of regulation.Third,the formulation of environmental regulations should be appropriate to the local conditions and avoid a “one size fits all” policy.Fourth,we must flexibly use market tools,pay attention to the combination of various environmental regulations,and give full play to the role of environmental regulation in promoting corporate competitiveness.