Research | Dai Rui: Innovating Green: Competition Meets Regulation

Release time：30 July 2025

In recent years, with the deepening of the “dual carbon” goals (carbon peaking and carbon neutrality), environmental regulations have become increasingly stringent. Balancing environmental responsibilities with economic benefits has become a common challenge for policymakers and businesses. Theoretical models and empirical studies have shown that environmental regulations can promote business innovation and encourage a shift toward clean technologies and green innovation, thereby addressing environmental challenges while maintaining economic growth and business performance. However, responses to environmental regulations vary significantly across firms and countries, which is probably associated with the interplay between regulations and market forces (especially market competition).

Innovating Green: Competition Meets Regulation, a paper co-authored by Dai Rui from the School of Management and Economics (SME), The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen); Duan Rui from the McMaster University; and Lilian Ng from the York University, clearly reveals for the first time that the intensity of market competition is becoming a key lever in determining whether environmental policies can stimulate green innovation. According to the study, in highly competitive markets, firms are more likely to view regulatory pressure as a driver of innovation and seek competitive advantages; conversely, insufficient competition will lead to a lack of motivation for innovation. The paper was recently accepted by Management Science, a top journal in international management.

About the Author