Does environmental regulation induce green innovation? a panel study of Chinese listed firms

Jingbo Cui, Jing Dai, Zhenxuan Wang, Xiande Zhao

Research output: Journal PublicationArticlepeer-review

101 Citations (Scopus)


To promote cleaner production, China launched nation-wide Cleaner Production Audit (CPA) program in 2004. This study examines the “weak” version of the Porter hypothesis while focusing on Chinese listed firms from 1990 to 2010. In this study, we provided evidence on the influence of China's CPA program on innovation based on green patent data. Using a difference-in-difference (DID) method, we find that there is a positive regulation effect on green innovation, i.e. the “weak” Porter hypothesis has been realized in the CPA program in China. Moreover, our results suggest that the regulation effect is more pronounced in encouraging radical green innovations measured by environmental invention patents than incremental green innovation measured by environmental utility patents. Then, we find that the CPA program regulatory effect is also affected by moderation variables such as industrial pollution intensity, but not by firm ownership. Our findings shed light on the policy implications on how firms respond to environmental regulations.

Original languageEnglish
Article number121492
JournalTechnological Forecasting and Social Change
Publication statusPublished - Mar 2022


  • China
  • Environmental innovation
  • Green patent data
  • Regulation

ASJC Scopus subject areas

  • Business and International Management
  • Applied Psychology
  • Management of Technology and Innovation


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