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Article
Publication date: 24 June 2021

Zaiyang Xie, Liang Qu, Runhui Lin and Qiutong Guo

Environmental regulation is in a continuous state of intense change and modification amid the long-term tensions between environmental protection and economic growth. In this…

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Abstract

Purpose

Environmental regulation is in a continuous state of intense change and modification amid the long-term tensions between environmental protection and economic growth. In this article, the authors creatively investigate how fluctuations of environmental regulation influence a nation's economic growth while also examining the mediating effect of technological innovation.

Design/methodology/approach

Using sample data of 36 Organisation for Economic Co-operation and Development (OECD) countries from 2013 to 2018, environmental regulation is differentiated in two aspects of formal environmental regulation (FER) and informal environmental regulation (IER) and analyzed to assess the effects of regulatory fluctuations on investment and technological innovation.

Findings

The research results demonstrate that both FER fluctuation and IER fluctuation exert a significant negative impact on economic growth. These two fluctuations in environmental regulation increase uncertainty and unpredictable risks for corporations and investors, significantly stifling the willingness to contribute to innovation activities and leading to a diminished level of innovation. Technological innovation is revealed to have a mediating influence on the relationship of environmental regulation fluctuation to economic growth.

Originality/value

These findings enrich the research on the impact of environmental regulation from a dynamic, multinational perspective, contributing to the literature by exploring the relationships between environmental regulation fluctuation, technological innovation and economic growth at the OECD-country level.

Details

Journal of Enterprise Information Management, vol. 35 no. 4/5
Type: Research Article
ISSN: 1741-0398

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