Do market-based environmental regulations always promote enterprise green innovation commercialization?

Motivated by increasingly strengthened market-based environmental regulations, enterprises intend to pursue both pollution reduction and competitive edge through developing green innovation. Although the volume of green innovation has increased substantially, some of them are not successfully commercialized to pay rewards for enterprises. Hence, how market-based environmental regulations affect enterprise green innovation commercialization is urgently to be explored. Using Chinese manufacturing enterprise panel data, this paper finds that market-based environmental regulations impact enterprise green innovation commercialization in an inverted U shape relationship. Regarding influencing factors, on the technical dimensions, market-based environmental regulation can improve the green innovation commercialization through improving the green innovation quality. Concerning non-technical factors, market development level, openness level and regional green innovation capacity can positively moderate the inverted U shape relationship between market-based environmental regulation and enterprise green innovation commercialization. Finally, it is found the impact of marketbased environmental regulation on enterprise green innovation commercialization varies both at the regional and enterprise level. Based on the results, policymakers should optimize the use of market-based environmental regulation by considering its nonlinear impact on green innovation commercialization. Policymakers can also improve non-technical factors, including market development level, openness level and regional green innovation capacity, to increase the positive impact of market-based environmental regulation on enterprise green innovation commercialization.