Environmental judicature and enterprises’ green technology innovation: A revisit of the porter hypothesis

Abstract

The existing research on the judicial system as the subject of environmental regulation has largely ignored in the Porter Hypothesis. Using the establishment of the environmental court in China, we construct the time-varying difference-in-differences model and use it to examines the rationality of the Porter Hypothesis. The main findings of this study are as follows: (1) as an effective form of environmental regulation, environmental courts significantly improve the level of enterprises’ green technology innovation, which demonstrates the Porter hypothesis positively in China; (2) the establishment of environmental courts can effectively enhance the quality of green technology innovation, and the effect is more significant amongst non-state enterprises and heavily polluting enterprises; (3) The possible mechanisms for the effect of environmental courts on enterprises’ green technology innovation are further verified, including enhancing the environmental attention from government and green financial support from the market. Through the findings of this study, we are able to uncover the effects of environmental judicature on enterprises’ green technology innovation and provide a practical foundation for the development of environmental judicature specialisation.