Research on the Synergistic Effect of Environmental Protection Investment and Technological Innovation on Corporate Performance

The research is financed by the National Natural Science Foundation of China. No. 71874103 and Shanxi Provincial Philosophy and Social Science Planning Project. No. 2019B015 (Sponsoring information) Abstract Based on the theory of corporate social responsibility, stakeholder theory and resource-based theory, using the panel data of China's listed companies in heavily polluting industries from 2013 to 2017, the paper reveals the complex relationship between environmental protection investment, technological innovation and corporate performance from both short-term and long-term perspectives, especially the synergistic effect of environmental protection investment and technological innovation on corporate performance. The results show that: (1) with the passage of time, the impact of environmental protection investment on corporate performance changed from negative to positive; (2) corporate technology innovation has a positive impact on corporate performance, but the hysteresis exists in the impact; and (3) the impact of environmental protection investment and technological innovation on short-term and long-term performance of enterprises forms a synergistic effect of "1+1>2". Therefore, enterprises should establish the strategy of integration of environmental protection and technological innovation. While government departments strengthen the supervision of environmental violations, they should properly increase the intensity of environmental protection and R&D subsidies. The public should support the development of green enterprises with practical actions. Keywords: environmental protection investment, technological innovation, corporate performance, synergistic effects DOI: 10.7176/EJBM/12-11-01 Publication date: April 30th 202