The impact of environmental regulation on the development of new quality productive forces in heavily polluting enterprises

Abstract The advancement of ecological civilization depends on striking a balance between environmental protection and economic expansion. It is also essential for long-term national development and governance. According to the theoretical framework provided by the Porter hypothesis, environmental regulations have the potential to improve economic efficiency and increase corporate competitiveness. This research uses A-share listed companies to analyze the effects of environmental regulations on the new quality productive forces in heavily polluting enterprises from 2011 to 2022. The new Environmental Protection Law, passed in 2015, serves as the framework for the research. Empirical findings indicate that environmental regulations facilitate the new quality productive forces in heavily polluting enterprises, supported by robustness tests. The main ways that environmental regulations drive the new quality productive forces are through increased investment in technological innovation and wider access to financing. The analysis shows that new environmental law, especially in non-state-owned businesses and those with sufficient cash flow, successfully encourage the smooth integration of environmental preservation and new quality productive forces. The ramifications highlight how crucial it is to keep improving the recently passed Environmental Protection Law, developing green technology policies, and opening up new funding sources in order to promote ecological civilization and sustainable economic growth.