Environmental regulation, green innovation and high-quality development of enterprise: Evidence from China

Environmental regulation, as a safe line of defense for the ecological environment, is an important practical exploration to guide green innovation and to promote high-quality development of enterprise. This research examines the impact of environmental regulation on high-quality development of enterprise and the realization path based on the data of Chinese A-share listed enterprises from 2010 to 2020. The fixed-effect model reveals a significant positive correlation between environmental regulation and high-quality development of enterprise. Moreover, the chain intermediation model is used to examine the realization path. Specifically, environmental regulation hinders enterprises' green management innovation and thus has a negative impact on high-quality development of enterprise, which is manifested as a masking effect. Environmental regulation has a positive impact on the high-quality development of enterprise through enhancing green technology innovation or the intermediation chain of "promoting green technology innovation - driving green management innovation". Heterogeneity analysis reveals that environmental regulation has a facilitating effect on the high-quality development of enterprises for non-state-owned enterprises, and enterprises within the carbon emission trading pilot areas. In addition, environmental regulation has the strongest promoting effect on high-quality development of enterprise in the mature stage, followed by the growth stage. The research provides actionable paths for the government to optimize the institutional system of ecological environment construction and accelerate the modernization process of environmental governance.