Green innovation: a key strategy for enterprises and countries to gain a competitive edge in the global market

Green innovation (GI) is an essential part of enterprises and countries for gaining a prior position in the global market. This study aims to investigate the nexus between the Five-Year Plan command-and-control environmental regulation (ER), GI, and global competitiveness. This research investigates the Five-Year Plan command-and-control environmental regulation's impact on high-polluting firms, research and development investments, and environmental concerns, exploring how emission reduction promotes innovation for global competitiveness. The Resource-Based View theory is employed to analyze how unique resources, such as the environmental Five-Year Plan and strategic research and development investments, lead to sustainable competitive advantages. The study gathered data from China Stock Market & Accounting Research, China's statistical yearbook, and Inco Pat databases, employing a continuous Difference-in-Differences (DD) model to assess the Five-Year Plan command-and-control ER's impact on GI Quality. Instruments included GI Quality, Official Promotional Pressure, financial development, and control variables. The findings highlight positive correlations between the Five-Year Plan command-and-control ER and GI, increased research and development investments in high-polluting enterprises, and the beneficial impact of local government commitment to economic development (ED). The practical implications guide enterprises in leveraging the Five-Year Plan command-and-control ER and research and development investments for enhanced competitiveness, while the theoretical contribution lies in illustrating how environmental initiatives serve as valuable strategic resources within the Resource-Based View framework. Researchers, policymakers, and businesses interested in leveraging environmental initiatives for competitive advantages would benefit.