China's Green Innovation Soars with Environmental Regulation Impact on Firms.
The study looked at how China's Cleaner Production Audit program affected green innovation in listed firms from 1990 to 2010. They found that the program had a positive impact on green innovation, especially on radical green inventions. The effect was stronger in industries with higher pollution levels. Firm ownership did not affect the regulatory impact. This shows that environmental regulations can encourage firms to come up with new, environmentally friendly ideas.