Research On Environmental Regulation, Financial Development And Corporate Innovatio

Since the reform and opening-up,our country has become the second largest economy in the world after 40 years of rapid growth in the context of market-oriented reform,secondly only to America.However,the economic growth pattern of our country was comparatively extensive in the past,the damage to the ecological environment cannot be neglected.With the deterioration of ecological environment,China has gradually paid attention to ecological environment problem so as to achieve win-win of economy and environment.Especially,since the 18th National Congress of the Communist Party of China,the Party?Central?Committee?with?Comrade?Xi?Jinping?at its core put forward important judgement that "lucid waters and lush mountains are invaluable assets",which pushed the protection of ecological environment to a new height.The report of the 19th National Congress of the CPC puts forward that "we must establish and practice the idea that lucid waters and lush mountains are invaluable assets","treat the ecological environment like our life",and“implement the strictest ecological and environmental protection system".With China’s increasing attention to environmental protection,various specific environmental laws and regulations are constantly put in place,and environmental regulations is becoming more and more strict.Based on this,it is necessary to do corresponding research around environmental regulation in combination with China’s national conditions in the new era.The increasingly stringent environmental regulation has a greater impact on the production of enterprises,enterprises have to take more into account the pollution control issues in the production process,and this will correspondingly increase the production costs of enterprises.For enterprises,the better way to treat pollution is not end treatment,but technological innovation,which on the one hand can reduce pollutant emissions,and on the other hand can improve production efficiency,reduce production costs,improve profit margins and offset the cost increase caused by the increase of pollution control intensity.However,technological innovation requires enterprises to invest a large amount of research and development funds,otherwise,it is difficult for enterprises to carry out technological innovation.The main financing methods for enterprises to realize technological innovation are government subsidies,bank credit,equity financing,and endogenous financing,etc.Given the limitations of government subsidies and endogenous financing,bank credit and equity financing are the most important financing methods for enterprises to carry out technological innovation.At present,scholars still lack an in-depth and systematic discussion on the relationship among environmental regulation,financial development and enterprise innovation.In view of the deficiencies in the existing studies,this paper attempts to conduct a more in-depth analysis.This paper adheres to the guidance of Marxist political economy,follows a certain logical structure,uses the multidisciplinary theoretical knowledge of Marxist political economy,finance,management and mathematical economics,and adopts scientific research methods such as panel data analysis methods,evolutionary game theory,and case studies,and conducts research under a comprehensive theoretical analysis framework in an attempt to analyze this issue.This will not only contribute to the enrichment of socialist market economy theory,but also provide corresponding policy recommendations for the innovation of enterprises in the context of environmental regulation and financial development,the behavior of the government in this process,and the development of the financial system.This paper will try to answer the following questions:How does environmental regulation and financial development affect enterprise innovation?What role does financial development play in the process of environmental regulation affecting enterprise innovation?Considering the mutual interests of government,financial institutions,and enterprises,how can we achieve the social optimal state of the behavior of the three parties?And so on.In the theoretical analysis,this paper applies the principles of Marxist political economy and Western economics to systematically explain the influence of environmental regulation and financial development on enterprise innovation,and proposes the hypothesis that there is an inverted U-shaped relationship between environmental regulation and enterprise innovation,and financial development will positively promote enterprise innovation and so on.The role of financial development in the process of environmental regulation promoting firm innovation is also analyzed,and it is argued that financial development positively regulates the role of environmental regulation in promoting firm innovation.In this section,the moderating effect of financial development in firms with different ownership,firms belonging to different industries,and firms located in different locations are also illustrated.In addition to the moderating effect of financial development,there is also a game relationship among the subjects of environmental regulation,financial development and enterprise innovation due to the close correlation of their interests.Therefore,following the theoretical analysis of the moderating effect,this paper further analyzes the game relationship among the three subjects,enriches the research process and corresponding conclusions,and deepens the understanding of this issue.Based on the theoretical analysis of the impact of environmental regulation and financial development on enterprise innovation,and the regulatory effect of financial development,the paper applies the data of A-share listed companies,carries out specific empirical analysis by using panel data models and so on.The research found:firstly,there exists nonlinear inverted U-shaped relationship between environmental regulation and enterprise innovation.By calculation,the inflection point value of China’s environmental regulation is about 6.81,at present the overall environmental regulation level of China is about 0.061,which is located in the left of the inflection point,but there is a certain distance,indicating that China’s environmental regulation has great innovation potential;secondly,financial development doesn’t play a positive influence on enterprise innovation,perhaps because the enterprises’ financing method in China’s financial market is based primarily on loan of financial institution,while capital market didn’t exert its influence well;Thirdly,financial development in strict environmental regulation regulates positively environmental regulation’s impact on enterprise innovation;Fourthly,from the perspective of mechanism of action,regulation effect of financial development can indirectly exert effect on enterprise innovation by the capital investment of enterprise research and development.The paper also found that there is heterogeneity of regulatory effect of financial development between state-owned enterprises and private enterprises,between non-heavy polluted industry enterprises and heavy polluted industry enterprises,between enterprises in western region and enterprises in central and eastern region.Further,based on the theoretical analysis of the game relationship among the three subjects,this paper takes the perspective of evolutionary game and uses the analysis method of evolutionary game theory to describe the game relationship among the three parties in detail.Specifically,this paper incorporates the bank’s lending behavior into the evolutionary game model of environmental regulation and enterprise technological innovation combining the national conditions of China,thereby constructing a tripartite game model.By constructing the payment matrix of the three-party game subject,analyzing the replicated dynamic equations and the specific situation of the stabilization point under the game equilibrium,the strategic choices of government environmental regulation,bank lending behavior and enterprise technology innovation are derived.It is found that the government actively regulates the environment,banks take the corresponding financial responsibility to support the development of enterprises,and enterprises take the initiative to carry out technological innovation under the condition of strict government environmental regulation will reach the social optimal outcome.Meanwhile,this paper conducted certain numerical simulation to above analysis by MATLAB software.The simulation result showed that with the improvement of income level,bank converges to the optimal path at the fastest rate;with the increase of cost,the slowdown rate of enterprise converging to the optimal path is the highest.The initial effort level of three parties had a huge impact on ultimate evolution outcom.In view of the above analysis,this paper presents an empirical analysis of the current development of environmental regulation,financial development,and corporate innovation in China,and identifies the corresponding problems and obstacles to their development.Then,the paper summarizes specific practical cases and experiences at home and abroad,and provides some reference for the improvement of environmental regulation,financial development,and enterprise innovation policies in China in the new era.Finally,combined with the corresponding conclusions of the above theoretical analysis,empirical analysis,game analysis,and current situation analysis,this paper puts forward relevant policy suggestions.The policy suggestions of this paper are as follows:for the government,in order to do a better job of environmental regulation,the government needs to improve the corresponding environmental regulation policies;for financial development,the development of financial market should be further improved and the allocation of financial resources should be optimized.At the same time,banks should also vigorously develop green finance to help enterprises make green transformation;for enterprises,we should deepen the combination of enterprise innovation policies to help promote enterprise innovation smoothly,especially enterprises should strengthen their own core technological innovation to better cope with environmental regulation.