An empirical study of the relationship between pollution levels, firm characteristics, and innovation ability in China’s strategic emerging industry

Abstract

Under the background of environmental protection, the government of China has issued a series of environmental regulations. More and more enterprises are using technological innovation to improve production quality and reduce environmental pollution. This makes the government and entrepreneurs pay more attention to strategic emerging industries. A strategic emerging industry is characterized by advanced technology, minimal resource consumption, and significant growth potential, and the number of enterprises related to strategic emerging industries also increases. Therefore, the impact of the intensity level of environmental regulation on technological innovation in strategic emerging industries has also become particularly important and of great research significance. In this paper, the panel data of 161 listed companies in China's industries from 2018 to 2021 are used to explore the influence of environmental regulations on their technological innovation by applying the Generalized Moment Method (GMM). The result confirms that the intensity level of environmental regulation and enterprise characteristics positively promote the technological innovation of strategic emerging industries.