A nonlinear relationship between corporate environmental performance and economic performance of green technology innovation: Moderating effect of government market‐based regulations

Abstract Green technology innovation corporates can effectively coordinate the relationship between the environment and the economy, which has been an area of interest among academia and governments. To stimulate the sustainable green technology innovation of corporates, it is necessary to clarify the internal correlation among green technology innovation, environmental performance, and economic performance. Based on the information of 642 industrial corporates obtained from a field investigation in China, this article systematically examines the relationships between corporate green technology innovation and environmental performance, economic performance, and the moderating effect of different governmental market‐based regulations on these relationships. The results show the following. (1) Green technology innovation can significantly improve corporate environmental performance and economic performance. (2) Corporate environmental performance can be transformed into economic performance, and an improvement in environmental performance leads to an increase in the economic performance produced by unit environmental performance, which shows a nonlinear relationship. (3) Government supply‐based market regulation negatively moderates the relationship between end‐of‐pipe technology innovation and environmental performance while positively moderating the relationship between green process innovation and environmental performance and the relationship between green product innovation and economic performance; government demand‐based market regulation positively moderates the relationship between green process innovation and environmental performance and the relationship between green process innovation and economic performance; government competitive‐based market regulation only has a positive effect on the relationship between green product innovation and economic performance. (4) Government market‐based regulations can positively promote the transformation from environmental performance to economic performance. The stronger the market‐based regulations, the greater the economic performance that corporate environmental performance can bring.