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Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections

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Abstract

The purpose of this paper is to investigate the nonlinear relationship between environmental regulations and enterprise innovation performance, as well as pay attention to the boundary condition of political connections. The data we applied in this paper are listed Chinese industrial firms during 2012–2017 to test the effect of environmental regulations on enterprises innovation performance, the moderating effect of political connections and the mediating effect of Research and Development (R&D) investments. The results show that (1) environmental regulations have a U-shaped relationship with enterprises innovation performance in which the R&D investments play a mediating role. (2) Political connections negatively moderate the relationship between environmental regulations and enterprises innovation performance via R&D investments. Except political connections’ moderating effect on the relationship between environmental regulations and R&D investments, (1) & (2) are demonstrated in a much more apparent manner among non-state-owned enterprises than that among state-owned enterprises. We also examined hypotheses among different regions of China in our studies.

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Data availability

The datasets generated during and/or analyses during the current study are available. We adopt data on Chinese A-share listed industry firms from 2013 to 2017. The data of environmental regulations are from the CHINA ENVIRONMENT YEARBOOK and provincial statistical yearbooks. The data used for calculating the TFP, the political background of the chairman and CEO, as well as those control variables are from the China Stock Market and Accounting Research (CSMAR) database.

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Acknowledgements

We declare that we have no financial and personal relationships with other people or organizations that can inappropriately influence our work, there is no professional or other personal interest of any nature or kind in any product, service and/or company that could be construed as influencing the position presented in, or the review of, the manuscript entitled.

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Author notes

  1. Jintao Zhang, Li Meng authors contributed equally to this study.

Authors and Affiliations

  1. School of Economic and Management, Tongji University, 1500 Siping Road, Yangpu District, Shanghai, 200092, China

    Jintao Zhang & Lu Han

  2. Department of Computer Science, City University of Hong Kong, Hong Kong, 999077, China

    Zhen Yang

  3. School of Business, Shandong Normal University, Jinan, 250330, China

    Li Meng

Authors
  1. Jintao Zhang
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  2. Zhen Yang
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  3. Li Meng
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  4. Lu Han
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Contributions

Jintao Zhang contributed to conceptualization, resources, writing—original draft, writing—review & editing; Zhen Yang contributed to software, formal analysis, data curation, writing—original draft; Li Meng contributed to conceptualization, methodology, validation, investigation, writing—original draft; Lu Han contributed to resources, writing—review & editing, supervision, project administration.

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Correspondence to Lu Han.

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Zhang, J., Yang, Z., Meng, L. et al. Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections. Environ Dev Sustain 24, 4088–4109 (2022). https://doi.org/10.1007/s10668-021-01606-7

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  • DOI: https://doi.org/10.1007/s10668-021-01606-7

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