The Impact of Environmental Regulations on Green Technology Innovation: Evidence From Chinese Transportation Industry

ABSTRACT This study addresses the gap in existing literature regarding the impact of environmental regulation on green technology innovation within the transportation sector. Using a sample of listed Chinese companies from 2004 to 2021, employing two‐way fixed effects models, the research explores the relationship between environmental regulation and green technology innovation. Heterogeneity analyses consider property rights, geographical location, agency cost, and equity concentration. The key findings are: (1) Environmental regulations effectively stimulate green technology innovation, following an inverted U‐shaped pattern. (2) State‐owned enterprises respond more significantly than non‐state‐owned counterparts. (3) Eastern and central Chinese enterprises demonstrate enhanced capabilities in green technology innovation under environmental regulations. (4) High agency costs impede green technology innovation, while (5) high equity concentration fosters it. This study supports the Porter hypothesis, contributing to environmental regulation literature and offering policymakers comprehensive recommendations.