RESEARCH ON THE INFLUENCE OF ENVIRONMENTAL REGULATION ON BUSINESS PERFORMANCE: THE MODERATING ROLE OF GREEN TECHNOLOGY INNOVATION

XIANG Li, HU Long-ying

ABSTRACT: Based on the panel data of 27 industrial sectors in China from 2003 to 2011, the influence of environmental regulation on the business performance was tested by using the fixed effect model, and the moderating role of green technology innovation is discussed from the aspects of green product innovation and green process innovation. The results show that environmental regulation has a significant positive effect on the performance of industrial enterprises. Green product innovation has a positive impact on business performance, but the impact of green process innovation on business performance is not significant. Green product innovation and green process innovation have negative moderating impacts on the relationship of environmental regulation and business performance.

Keywords: Environmental regulation, Business performance, Green technology innovation