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https://doi.org/10.62836/emi.v4i5.395
Wen Zhang, & Lizi Yang. (2025). Research on the Impact of Environmental Protection Investment and R&D Input on the Financial Performance of Heavily Polluting Industries. Economics & Management Information, 4(5), 1–11. https://doi.org/10.62836/emi.v4i5.395
Volume 4, Issue 5, October 2025
Copyright (c) 2025 Wen Zhang, Lizi Yang
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This work is licensed under a Creative Commons Attribution 4.0 International License.

Research on the Impact of Environmental Protection Investment and R&D Input on the Financial Performance of Heavily Polluting Industries

This paper examines the impact of environmental protection investment and R&D investment on the financial performance of heavily polluting enterprises in China. Using panel data from listed companies in the Shanghai and Shenzhen stock markets from 2008 to 2018, the study constructs multiple regression models to analyze both short-term and long-term effects. The results show: (1) environmental protection investment significantly improves short-term financial performance, and its positive effect becomes stronger in lagged measures; (2) R&D investment enhances short-term financial performance but may hinder long-term performance due to its high risk and the potential for insufficient follow-up investment to become sunk costs; (3) controlling for R&D input reveals a positive synergistic effect: coordinated R&D and environmental investment amplifies the positive impact of environmental investment on performance. The paper concludes with recommendations for firms and policymakers to align green investment with sustained innovation strategies.

environmental protection investment R&D investment financial performance synergy effect

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Supporting Agencies

  1. Funding: The authors are grateful to the financial support from the Yulin Industry-University-Research Project (CXY2022-183).