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Environmental regulation and firm R&D manipulation behaviour: Evidence from the low-carbon city pilot program in China

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  • Sun, Zhennan
  • Du, Qunyang

Abstract

With the increasing demand for a green economy and energy transition, firms, as the main players in the market, should focus on sustainable business models. The paper incorporates business strategy into a logical analytical framework to explore the impact of the LCCP program in China on firm R&D manipulation and related mechanisms. The findings indicate that the LCCP program significantly mitigates firm R&D manipulation. Moreover, the mitigating effect of the LCCP program has a more significant effect on R&D manipulation by private firms than by SOEs. The LCCP program, as a comprehensive environmental policy, effectively influences firm behaviour in sustainable business models. Our findings provide empirical evidence for policymakers.

Suggested Citation

  • Sun, Zhennan & Du, Qunyang, 2025. "Environmental regulation and firm R&D manipulation behaviour: Evidence from the low-carbon city pilot program in China," International Review of Economics & Finance, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:reveco:v:98:y:2025:i:c:s1059056025000437
    DOI: 10.1016/j.iref.2025.103880
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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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