Abstract:      Green innovation is an important driving force for promoting green transformation and achieving sustainable development in enterprises. This paper adopted the implementation of environmental protection vertical renovation below the provincial level (EPVR) as a policy shock, used the green patent data of heavily polluting listed enterprises in China from 2013 to 2021, and constructed the staggered DID model to systematically examine the relationship, mechanism, and heterogeneous impact between EPVR and enterprise green innovation. The result showed that EPVR has significantly improved enterprises green innovation by reducing local protection and increasing environmental regulatory independence, and has a greater impact on enterprises with small tax contributions, low employment, and weak social connections. Furthermore, this paper found that EPVR will weaken the territorial connections and information advantages of environmental protection departments, leading to a decrease in environmental regulatory efficiency. Improving information conditions at the regional and corporate levels is beneficial for mitigating this adverse impact, and enhancing the effect of EPVR on enterprises green innovation. The heterogeneity test found that regions with low economic growth pressure, high environmental governance pressure, and enterprises with low cash flow pressure are more sensitive to EPVR policy. The conclusion of this paper explained whether and how EPVR can promote enterprises green innovation, thus providing important policy insights for promoting green transformation of enterprises and promoting sustainable economic and social development under the goal of "carbon peak and carbon neutrality".

Key words: environmental protection vertical renovation below the provincial level (EPVR), green innovation, local protection, information condition