Regulation-driven or financial buffer? A study on the influence mechanism and moderating effect of environmental regulation on corporate green governance

Against the backdrop of intensifying global environmental pressures and the emergence of green transition as a core development pathway, exploring how environmental regulations can effectively drive corporate green governance is a critical theoretical and policy issue for achieving sustainable development. Based on this, this paper empirically examines the impact of environmental regulations on corporate green governance and its underlying mechanisms. The results indicate that environmental regulations significantly promote corporate green governance. To mitigate endogeneity issues, a quasi-natural experiment was conducted using the "carbon trading pilot policy" as an exogenous shock. The conclusions were validated through both parallel trends tests and placebo tests, demonstrating that the policy effects are robust and reliable. Mechanism analysis reveals that environmental regulations exert their influence through three pathways: enhancing the efficiency of green innovation R&D and commercialization, reducing debt financing costs, and lowering agency costs. Moderation analysis reveals that corporate financialization positively reinforces the driving effect of environmental regulation. Further heterogeneity analysis shows that the promotional effect of environmental regulation exhibits distinct three-dimensional heterogeneity: at the firm level, it is positively moderated by human capital, green awareness, and internal control; at the industry level, it is stronger when competition is lower; and at the regional level, it depends on higher levels of marketization and green finance development. In summary, this study provides both theoretical and empirical evidence for refining environmental regulation policies and incentivizing corporate green transformation.