Can direct environmental regulation promote green technology innovation in heavily polluting industries? Evidence from Chinese listed companies.

Faced with the dual constraints of resources and the environment, green technology innovation has become an important measure to solve the development challenges of heavily polluting industries. From the perspective of institutional regulation theory, this paper studies the impact of direct environmental regulation on green technology innovation in Chinese listed companies of heavily polluting industries by using the Panel Poisson fixed effect model. Besides, the heterogeneity of ownership and industry is discussed. The results indicate that direct environmental regulations exert a strong and significant incentive effect on green technology innovations in heavily polluting industries. Regarding the heterogeneity of enterprise ownership, direct environmental regulations were found to be more significant to the green technology innovations of state-owned listed companies in such industries. Considering industry heterogeneity, compared with labor-resource intensive industries, direct environmental regulation can effectively encourage green technology innovations in technology-capital intensive industries. This study provides a policy basis for promoting environmental governance and green technology innovation in China's heavily polluting industries.