As the importance of synergizing environmental protection and corporate performance becomes increasingly prominent, the impact of environmental regulation policies on corporate performance has become a hot topic in academic research. Taking the 2015 implementation of the revised "Environmental Protection Law" as a starting point, this study selects 828 heavily polluting enterprises listed on China's A-share market from 2010 to 2022 as a research sample. Using a Difference-in-Differences (DID) model, it explores the effects of environmental regulation policies on corporate performance and their underlying mechanisms. The findings reveal that stricter environmental regulations, following the implementation of the new law, have not adversely impacted corporate performance. Instead, these policies have facilitated performance improvements through mechanisms such as technological innovation. Further analysis highlights the critical mediating roles of green technological innovation and R&D investment. Heterogeneity analysis indicates that the policies' effects are more pronounced for non-multinational and non-state-owned enterprises, while the impact on multinational corporations is relatively weaker. Based on these findings, it is recommended to strengthen policy support for non-state-owned enterprises to drive their transformation and upgrading while leveraging the successful practices of multinational corporations to achieve a win-win outcome between environmental protection and corporate performance.

Yanlong Pan, Jinxia Zhu, Erwen Ma. Environmental Regulation Policies and Their Impact on the Performance of Heavily Polluting Enterprises—Evidence from China's A-share Listed Companies. Academic Journal of Business & Management (2025), Vol. 7, Issue 1: 127-134. https://doi.org/10.25236/AJBM.2025.070118.

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