Environmental Regulation; Financing Constraints and R&D Investment

Based on the data from 2010 to 2015 of Chinese manufacturing firms, the paper systematically examines the separate and joint influence of environmental regulation(ER) and fmancing constraints (FC) on the R&D investment of Chinese local firms. Our result shows that ER promote the R&D investment significantly, which is more apparent in heavily polluting enterprises than in clean production firms and more apparent among eastern region than central and western regions of China. We also fmd that FC has adverse effect on R&D investment and this effect is stronger in heavily polluting firms than in clean production firms, as well as among midwestem than eastern area. What's more, ER can weaken the adverse effects of FC on R&D and this function is more obvious in heavily polluting enterprises and among eastern region than in clean production enterprises and among midwestem region.