Research On The Mechanism Of Environmental Regulation On Green Innovation

The contradiction between environmental pollution and economic development has become increasingly prominent,and it is urgent to solve environmental problems.Environmental issues have risen to the national strategic level currently,and environmental governance must be intensified and environmental responsibilities must be strengthened.As the main culprit of environmental pollution,enterprises with heavy pollution should take the initiative to take the responsibility of environmental governance and green innovation.At the same time,the government’s implementation of environmental regulations is an effective way to restrict enterprises.The new "Environmental Protection Law",known as "the strictest environmental protection law in history",was promulgated in 2014,which further clarified the responsibilities of different entities in environmental supervision and pollution control.However,the issue of environmental governance is more complicated,and the stakeholders involved enterprises,governments,and the public each face different expected benefits.Therefore,these three entities have conflicts and cooperation in their goals,and the relationship is complicated.Based on the above background,this article incorporates the enterprise,government,and the public into the same research system,constructs a tripartite game model,and combines the system dynamics method to analyze whether the enterprise conducts green innovation,whether the government implements environmental regulations,and whether the public participates in supervision,and determine its influencing factors.On this basis,this article selects the sample data of Shanghai and Shenzhen A-share heavily polluting listed companies,based on the quasinatural experimental perspective of the promulgation of the new environmental protection law,and uses PSM-DID method to empirically study the impact mechanism of environmental regulation policies on corporate green innovation.Meanwhile,the environmental responsibility and the government subsidy variable are introduced to analyze its effect on the green innovation of the enterprise.Finally,this article takes M company as an example to analyze the effect of environmental regulation on its environmental governance and green innovation.Research indicates:(1)Regardless of the initial strategies of the three parties,after the continuous evolutionary game process,the three parties will eventually reach a stable equilibrium in the place where the enterprise conducts green innovation,the government implements environmental regulations,and the public participates in supervision;whether the government adopting the implementation of environmental regulation strategies has a greater impact on the decisions taken by enterprises.The public’s strategic choices have little influence on the government’s strategic choices;for enterprises,the cost of green innovation,the government subsidies they receive,and the government fines when innovating are the main influencing factor for the initiative of green innovation.It is worth noting that government subsidies are suitable for short-term and appropriate subsidies,but not for long-term large subsidies.Excessive subsidies can easily lead to dependence and inertia of enterprises,which is not conducive to enterprises’ innovation enthusiasm.(2)The promulgation of the new "Environmental Protection Law",an environmental regulatory policy,has significantly promoted the green innovation of heavily polluting companies,and this conclusion effectively supports the "Porter Hypothesis".In addition,from the results of the dynamic marginal effect test,the marginal utility of the environmental regulation was the largest in the year when the environmental regulation was implemented.With the increase of the year,the net effect of the environmental regulation policy is weakening,and the company’s emphasis on green innovation is correspondingly declining;The difference in the nature of the equity will affect the effect of environmental regulation policies on the promotion of corporate green innovation;environmental responsibility plays an intermediary role in the impact of environmental regulation policies on corporate green innovation,and government subsidies have a moderating effect on the relationship between environmental regulatory policies and corporate green innovation.