Environmental regulation and firm R&D investment: crowding out or inducing-- Empirical evidence from the collection of sulfur dioxide pollution fees
XIANG Rui-bing1, TIAN Cheng-shi1, ZHANG Yan-chao2
1. School of Statistics, Dongbei University of Finance and Economics, Dalian 116025, China; 2. School of Accounting, Henan University of Economics and Law, Zhengzhou 450046, China
Abstract：This paper takes SO2 emission fee, a market-based environmental regulation tool, as an example, and uses the data of China's non-financial listed enterprises from 2007 to 2019 to investigate the relationship between environmental regulation, firms’ R&D investment and stock market value. It is found that SO2 emission fee has a significant effect on the increase of R&D investment, and R&D investment has a significant effect on the fluctuation of stock market value. In terms of R&D investment, the incentive effect of SO2 emission fee on non-state-owned enterprises, small and medium-sized enterprises, senior executives' equity incentive, medium and high emission enterprises is stronger. In terms of stock market value, R&D investment under different levels of SO2 emission fee has a significant positive impact on stock market value fluctuations. On the one hand, the improvement of SO2 emission fee standard can cause green patent innovation except for enterprises in the low SO2 emission industry. On the other hand, under the background of environmental regulation, enterprises in medium and high SO2 emission industries apply R&D investment to improve their ability to absorb external advanced knowledge and technology to absorb "innovation", which proves that R&D investment has a two-way effective path to promote "endogenous self-green innovation" and "exogenous absorption innovation".
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