Environmental Regulation;Financing Constraints And R&D Investment

With the rapid development of China's economy,the environmental problems are becoming more and more prominent.According to the Academy of Social Sciences,the loss caused by environmental problems has accounted for 15%of GDP in China,which means that 6.7%of the economic growth has led to a loss of 15%.Since 1978,China has issued a series of laws and regulations concerning environmental protection,urging the listed companies to deal with the relationship between environmental protection and financial performance.In the face of increasingly severe environmental regulation(ER),improving the expense of research and development(R&D)is conducive to the coordination of enterprises to maintain their own economic interests and the protection of the environment.Therefore,it is necessary to explore the impact of ER on R&D investment.At the same time,because of financing constraints(FC),Enterprises often cannot carry out R&D activities according to the best decisions.Therefore,how to reduce the degree of FC and effectively solve the problem of insufficient R&D investment is very important.In terms of the relationship between ER,FC and R&D investment,almost nobody study the impact of ER and FC on R&D.Based on this,this paper uses the combined method of theoretical analysis and empirical analysis,selects Chinese manufacturing firms in 2011-2015 as data and systematically examines the separate and joint influence of ER and FC on the R&D investment.Our result shows that ER promote the R&D investment significantly,which is more apparent in heavily polluting enterprises than in clean production firms and more apparent among eastern region than central and western regions of China.We also find that FC has adverse effect on R&D investment and this effect is stronger in heavily polluting firms than in clean production firms,as well as among midwestern than eastern area.What's more,ER can weaken the adverse effects of FC on R&D and this function is more obvious in heavily polluting enterprises and among eastern region than in clean production enterprises and among midwestern region.This study provides a new direction for future research on the relationship between FC and R&D,that is taking ER into account.In addition,the research helps to find out the existing problems of the current ER policy in China and helps to guide enterprises to increase the intensity of R&D investment.