LAUSR

Abstract In recent years, the rapid development of China’s economy has caused a certain degree of environment damage, and the public environmental appeal has become increasingly strong, which has an impact on the production, management and sewage sludge treatment of the heavy-polluting enterprises. Using the search index of the network search engine as a proxy for public environmental appeal, this study examines how and why public environmental appeal affect innovation activities of them through multiple regression analysis. The results show that public environmental appeal has positive effects on innovation output, input and efficiency. Besides, mechanism analysis reveal that the increase of public environmental appeal can promote innovation level of heavy-polluting enterprises by promoting analyst coverage and reputation mechanism. This study puts forward a unique perspective, which not only extends the understanding of informal environmental regulations but also enlightens the sustainable development of heavy-polluting enterprises in China.