GOVERNMENT SUBSIDIES, ENVIRONMENTAL REGULATION, AND GREEN LOW-CARBON CIRCULAR PRODUCTION OF ENTERPRISES

As the micro-production subject of the economic system, enterprises are affected by various factors in the process of production and operation. A problem needing an urgent solution in modernised eco-environmental governance lies in guiding enterprises to conduct green low-carbon circular production. To explore the key influencing factors deciding green low-carbon production of enterprises, using the data of Shanghai and Shenzhen A-share listed companies in the heavily polluting industry during 2010-2019, the action mechanism of government subsidies and environmental regulation on green low-carbon circular production of enterprises was empirically analysed. Results show that (1) the two incentive constraint measures (government subsidies and environmental regulation) generate asymmetric influences on green low-carbon circular production of enterprises. As the green low-carbon circular production level is elevated, the incentive effect of government subsidies on enterprises is first enhanced and then declines, while that of environmental regulation is gradually weakened. (2) The incentive effects of government subsidies and environmental regulation are of spatial-temporal heterogeneity, exhibiting a stronger effect on promoting green low- carbon circular production of non-state-owned enterprises. Such an incentive effect is more remarkable during the period of "the 12th Five-Year Plan." (3) Government subsidies facilitate green low-carbon circular production of enterprises by strengthening enterprise financing constraints, lowering their bank loans, and increasing their R&D inputs, while environmental regulation affects enterprise behaviours mainly through the R&D inputs of enterprises. The conclusion is of great theoretical and practical significance for China and other developing countries to perfect the economic system characterised by green low-carbon circular development from a micro-level, aiming to achieve the goal of carbon peak and carbon neutrality.