The Effects Of Environmental Regulation Policies On Corporate Green Innovation ——The Mediating Effect Of Corporate Environmental Responsibility

The combination of command-and-control environmental policies（CCEP）,market-based environmental policies（MBEP）,and public participation environmental policies（PPEP）are important regulatory tools to effectively mitigate the negative environmental externalities caused by economic growth and achieve high-quality development.The production and operation activities of industrial enterprises are the pillars of the national economy,and the destructive environmental consequences of the early industrial enterprises’ extensive operations have prompted the government to shift the focus of environmental regulation to industrial enterprises and promulgate a series of environmental regulation policies to promote the implementation of environmentally friendly behavior by enterprises.Among them,green innovation is one of the most important measures for enterprises to reduce negative externalities of production and operation activities while improving their environmental and economic performance.This paper collected data during 2006-2016 in 30 Chinese provinces,autonomous regions,and cities to construct a panel data model in order to empirically analyze the direct effects of CCEP,MBEP,and PPEP on corporate green innovation,the mediating effect of corporate environmental responsibility between government regulation and corporate behavior,and the moderating effect of corporate’s gearing ratio on the relationship between CCEP and green innovation.In addition,this paper also analyzes the heterogeneity of the above models in different regions and industries contexts,and cross-sectionally compares the differences in heterogeneous factors on the corporate environmental concept and actual environmental governance behaviors.The results are as follows:1.In terms of the direct impact effect of environmental regulatory policies on firms’ green innovation,there is a non-linear inverted U-shaped relationship between CCEP and firms’ green innovation,in which the positive incentive interval of CCEP on green innovation is narrower and the negative inhibition interval is wider;MBEP have significant positive effects on enterprises’ green innovation;and PPEP have no significant effects on enterprises’ green innovation.This indicates that China’s industrial enterprises are still in the "cost compliance" stage,and the high intensity of environmental regulations will lead to an increase in the operating costs of enterprises,which will further compress the funds for green innovation and lead to a decrease in the level of green innovation;while the MBEP provides more direct support for industrial enterprises to carry out green innovation through financial support and tax relief.PPEP are still in a secondary position in the field of environmental regulation in China,the number of policies enacted and their intensities are far less than the first two types of policies,so their effects are smaller.2.Corporate environmental responsibility plays a mediating role in the "CCEPcorporate green innovation" relationship.Specifically,the increase in the intensity of CCEP can positively promote the positive environmental responsibility concept,and the positive environmental responsibility concept will lead to more green innovation behaviors of corporates,which indicates that the environmental responsibility concept can indeed be conducted by government policies.However,combining the results of the main effect of CCEP on corporate green innovation,we can find that the effect of CCEP in positively conducting corporate environmental responsibility and thus generating positive corporate green innovation behaviors cannot offset the reduction of corporate green innovation in industrial enterprises due to other factors,and this shortcoming needs to be compensated by other environmental regulatory policies to improve the overall green innovation level of industrial enterprises in China.3.Regional and industrial differences significantly affect the effects of the three types of environmental regulatory policies on the corporate environmental concept and corporate green innovation.The effect of CCEP on the promotion of corporate environmental concept does not vary with regional or industry differences,and the findings on the inhibitory effect on green innovation are generally consistent with the overall findings;MBEP show more obvious differences in their effects between different regions or industries,among which,the effects of MBEP on corporate environmental responsibility in the central and western regions,manufacturing corporate environmental responsibility and green innovation of non-manufacturing corporates in the central and western regions is significantly negative,which is related to the nature of market incentive policies,the socio-economic development status of the central and western regions,and the characteristics of the industries.The overall effect of PPEP on corporate environmental responsibility concept and corporate green innovation is unsatisfactory,further validating the finding that public participation policies are of secondary importance in the overall study.4.Enterprises in different regions and industries show different levels of corporate green innovation in the face of both financial and policy constraints.Specifically,considering financial constraints,both CCEP and PPEP have a negative effect on the level of green innovation of enterprises in the eastern region,but the balance sheet ratio brings some surplus funds for enterprises,which in turn can moderate the downward trend of corporate green innovation level due to debt pressure.For the nonmanufacturing sector,all three types of environmental regulation policies have a downward trend in the level of green innovation,given the degree of debt pressure faced by enterprises,but the shortage of funds for green innovation can be mitigated by enterprises’ access to debt.This paper establishes a model to empirically study the effects of three types of environmental regulatory policies on corporate green innovation,and it’s the first time uses text analysis method to construct corporate environmental responsibility indicators to clearly distinguish the difference between environmental concept and actual environmental behavior in corporates,which is important for carefully exploring the specific process of how corporate concept is transformed into corporate behaviors after being regulated by environmental policies,and how the internal and external factors influence this process.The findings from the analysis of the process in different regions and industry contexts can provide a more specific basis for the government to formulate policies that are tailored to the local context and to promote the concept of environmental responsibility among industrial enterprises in China,as well as the leapfrogging development of green innovation in enterprises.