Abstract:     Environmental regulation is one of the driving forces to promote green technology innovation, and its impact on green technology innovation has both positive and negative effects. Digital transformation can effectively solve the negative effects of environmental regulation. Based on the two-way fixed model and threshold regression model, this paper explored the impact of environmental regulation on green technology innovation and the moderating effect of digital transformation between them. The study found that: in general, the implementation of environmental regulation in China has a significant inhibitory effect on green technology innovation, and digital transformation can positively regulate environmental regulation to promote green technology innovation mainly by reducing the production cost path of enterprises. Further research on phased digital transformation showed that digital integration is the main means to reduce the production cost of enterprises and has nonlinear characteristics in regulating the relationship between the two. Therefore, the government should simultaneously promote environmental regulation and digital transformation, and better play the positive role of digital transformation in environmental regulation to stimulate green technology innovation. At the same time, it should also increase subsidies for corporate environmental regulation compliance costs and digital transformation input costs, so as to offset the increase in corporate production costs and expand the scale of digital integration.

Key words: environmental regulation, digital transformation, green technology innovation, phased regulatory effect