Abstract:    Since China′s reform and opening up, and with the continuous development of Chinese economy and the accelerated deepening of urbanization and industrialization, energy resource consumption and environmental pollution increases continuously. In order to prevent environment from further deterioration, China has put forward many environmental regulation policies. It is of great significance to study the impact of environmental regulations on corporate R&D and innovation activities for China to better achieve a win-win situation in environment and economy. This paper takes the Air Pollution Prevention and Control Action Plan ("Ten Measures on Air Pollution Prevention and Control") which is historically known as the most stringent environmental regulation as an example, combined with China′s micro-enterprise data from 2011 to 2017, to systematically investigate the impact of imperative environmental regulation on corporate innovation activities with the application of the DID (Difference-in-Difference) and DDD (Difference-in-Difference-in-Difference) methods. 
    The study shows that, no matter whether it is the overall effect from 2011 to 2015 or the year-by-year dynamic effect from 2014 to 2017, the Ten Measures on Air Pollution Prevention and Control plays no significant role in promoting corporate R&D and innovation activities. This conclusion is still valid after a series of robust tests including counterfactual tests, consideration of concurrent events, substitution variables. Through heterogeneity analysis, the result suggests that no matter whether it is a large-scale enterprise or a small-scale enterprise, they don′t have incentive to further increase R&D and innovation activities. Further mechanism analysis shows that although the government has increased financial support for the implementation of the Ten Measures on Air Pollution Prevention and Control, the funding of government didn′t directly support most of the companies in need. Many enterprises are inclined to pay pollution discharge fee or reduce production to evade the implementation. The reason is that enterprises will lose a lot of costs and reduce a large amount of revenue for most of the industrial products and factories need to be rectified while the implementation time is short. In that case, many companies tend to pay pollutant discharge fees or reduce production to escape from short-term implementation instead. What′s more, companies can maintain their own return on assets without R&D and innovation of their products and technology. It can be seen that, in the face of more and more severe environmental pollution, the government implements strict mandatory environmental regulations and puts the improvement of the environment first, which may not be able to effectively stimulate technological innovation of enterprises. As a result, based on the above research results, this paper suggests that the government should monitor the effects of policies in real time during the implementation of environmental regulations, appropriately increase the subsidies for green innovation of enterprises, attach importance to technological R&D and innovation of small and medium-sized enterprises, cultivate a market environment dominated by innovative technological products, and guide enterprises to take the initiative to carry out technology innovation.
    This paper makes the following contributions in policy evaluation. First, it examines the impact of Ten Measures on Air Pollution Prevention and Control on corporate R&D and innovation from a micro perspective for the first time. Second, based on the Generalized DID (Difference-in-Difference) model, this paper further constructs a DDD (Difference-in-Difference-in-Difference) model to more accurately assess the impact of Ten Measures on Air Pollution Prevention and Control on enterprise R&D and innovation. Third, the paper attempts to analyze the impact mechanism of Ten Measures on Air Pollution Prevention and Control on corporate innovation behavior from two perspectives of corporate cash flow and return on asset in order to deeply analyze the corporate motivations when implemented environmental regulations.

Key words: imperative environmental regulation, Ten Measures on Air Pollution Prevention and Control, enterprise innovation, difference-in-difference (DID), difference-in-difference-in-difference (DDD)