The impact of environmental regulations and financial restrictions on the technological innovation of companies

Subject Areas : • Corporate Governance and the related new subjects

Hossein Rostamkhani ¹ ( Accounting, Abdolrahman Sofi Razi Institute of Higher Education, Zanjan, Iran )
Dawood Tabarsa ² ( PhD student in financial engineering, Department of Financial Engineering, Tehran University, Tehran, Iran. )
Javad Moradi ³ ( PhD student in financial engineering, Department of Financial Engineering, Qazvin branch, Islamic Azad University, Qazvin, Iran. )

Received: 2024-01-14 Accepted : 2024-04-02 Published : 2024-04-29

Keywords: Environmental regulations, Financial restrictions, Technological innovation,

Abstract :

Objective: Compliance with environmental regulations and financial resources are very important for the survival of companies. On the other hand, in the competitive market, it is vital to pay attention to technological innovation in companies. Therefore, the purpose of this research is to investigate the impact of environmental regulations and financial restrictions on technological innovation in companies. Methodology: This research is practical in terms of purpose. It is also among post-event studies. To select a statistical sample using the screening method, 124 companies were selected from among the companies admitted to the Tehran Stock Exchange during the period of 2018- 2022. For data analysis, multivariate regression model was used by Eviuse software. Results: The obtained results showed that environmental regulations and financial restrictions have an inverse and direct relationship with technological innovation in companies, respectively. In other words, the more companies comply with environmental regulations and financial restrictions, the less technological innovation happens in those companies. Innovation: In today's era, attention to technological innovation in companies can be considered as an important and influential variable. Therefore, the innovation aspect of this research is that there has been no research on the relationship between environmental regulations and financial restrictions with technological innovation.

References:

1. impact of environmental regulations on the competitiveness of industries: Evidence from the manufacturing industries of the United States, England and Canada. Economic Modeling Quarterly, Volume 11, Number 39, 119-139.
2. Bayat, Ali, Ebrahimi, Zahra. (2018). Financial status and financing methods of the company and its effect on social and environmental reporting. The fifth national conference of applied researches in management and accounting, Tehran.
3. Boermans, M.A., & Willebrands, D. (2018). Financial constraints matter: Empirical evidence on borrowing behavior, microfinance and firm productivity. J. Dev. Enterpr., 23(2), 1–24.
4. Costa-Campi, M.T., García-Quevedo, J., & Martínez-Ros, E. (2017). What are the determinants of investment in environmental R & D? Energy Policy, 104, 455–465.
5. Debnath, S.C. (2015). Environmental regulations become restriction or a cause for innovation: A case study of Toyota Prius and Nissan Leaf. Procedia Soc. Behav.Sci., 195, 324–333.
6. Dayanti Dilmi, Zahra and Khodakarmi, Elham. (2017). The impact of publishing environmental news on the stock prices of companies listed on the Tehran Stock Exchange. Investment Knowledge Quarterly, Year 6, Number 23, 212-189.
7. Faraji, Omid, Fathi, Mohammad Reza and Bardi, Fatemeh. (2019). Financial constraints and competition in the product market: the mediating role of product pricing in business cycles. Journal of Financial Accounting Research.
8. Ford, J.A., Steen, J., & Verreynne, M.L. (2014). How environmental regulations affect innovation in the Australian oil and gas industry: Going beyond the Porter Hypothesis. J. Clean. Prod., 84, 204–213.
9. Ge, T., Li J., Sha R., & Hao, X. (2020). Environmental regulations, financial constraints and export green-sophistication: Evidence from China’s enterprises. J. Clean.Prod., 251, 1–13.
10. He, Y., Ding, X., & Yang, C. (2021). Do environmental regulations and financial constraints stimulate corporate technological innovation? Evidence from China. Journal of Asian Economics, 72, 101265.
11. Hamidi, S., & Benabdeljlil, N. (2015), Managerial and Technological Innovations: Any Relationship?, Procedia- Social and Behavioral Sciences, 181, 286-292.
12. Jiang, W. (2015). Does environmental regulation affect technological innovation of manufacturing firms in China? Empirical study based on micro data. J. Financ. Econ., 41(2), 76-87. (In Chinese).
13. Nazaripour, Mohammad and Mirzaei, Fahmia. (2018). Investigating the impact of strategic cost management on financial performance with an emphasis on environmental costs. Industrial Management Studies, Year 16, Number 51, 234-207.
14. Namazi, Mohammad, Moghimi, Fatemeh. (2018). Investigating the impact of structures related to innovation growth and the mediating role of innovation challenges on the financial and economic performance of Tehran Stock Exchange companies. Journal. of financial accounting research. Year 11, spring 2018, number (39).
15. Nakamori Y. (2020). Innovation Theory. In: Knowledge Construction Methodology. Translational Systems Sciences, vol 20. Springer, Singapore.
16. Rezaei, Halimah. (2023). Investigating the effect of financial constraints and liquidity on investment opportunities. New research approaches in management and accounting quarterly, 7th year, number 88, spring 1402, pp. 888-877.
17. Rahimi, Faraj Elah, Mehrabi, Ali and Eskandari, Yasser. (2019). The effect of environmental commitment on green innovation and sustainable performance with the moderating role of environmental education of employees in Mahshahr petrochemical companies. Man and Environment, Volume 17, No. 4, 25-38.
18. Salimifar, Anita, Khanleri, Amir and Masoumi Khalji, Hamid Reza. (2019). The impact of quality management on green innovation with the moderating role of environmental regulations (Zagores Petrochemical). The second national conference of modern economics, management and accounting studies in Iran, Tehran.
19. Tahmasabi Limoni, Safiya. (2022). Factor analysis of technological innovation capabilities based on individual knowledge management, case study: public libraries of the country. Quarterly journal of resource management and information services, 9th year, 2nd issue.
20. Tidd, J., Bessant, J. (2014). Managing innovation integrating technological, market and organizational change. John Wiley and Sons Ltd.
21. Zhou, Y. (2015). State power and environmental initiatives in China: Analyzing China’s green building program through an ecological modernization perspective. Geoforum, 61.
22. Zarei, Ali Asghar, Ebrahimi, Seyyed Abbas. (2018). Technological innovation: efficient and effective internal and external organizational factors. Technological Development Quarterly, Year 14, Volume 55.