Drivers of environmental performance

The impact of business income, innovations, and urban population on the environmental indicators of new products has been investi­gated. In this context, the uncertainty of eco­nomic policy and external shocks such as COVID-19 are taken into account as moderating factors to assess whether external shocks disrupt the sustainability of new products. The panel data from 30 Chinese provinces for the years 2013 to 2024 were analysed using a two-step GMM regression system. (GMM – Generalized Method of Moments in statistics and econo­metrics). The analysis results highlighted the negative role of income from the main business and urban population on the environmental indicators of new products, while innovations exhibit a positive influence. In addition, EPU (EPU – Economic Policy Uncertainty) plays a positive moderating role, but at the same time demonstrates a negative impact on the rela­tion­ship between innovations and the environ­mental indicators of new products. It has been found that the moderating influence of COVID-19 is significantly positive. Considering the political implications, businesses should ensure that profitability does not come at the expense of sustainability. There should be a balance bet­ween financial goals and environmental issues. Additionally, the government should tackle uncertainty in economic policy, as stable policy can stimulate the development of green products