Abstract: When enterprises with monopoly power are facing environmental regulation, they can realize the Porter effect through innovation, or maximize profits by transferring compliance costs. Based on the data of listed companies, double difference model and triple difference model, this paper systematically evaluates the impact of strong environmental supervision on R & D innovation of listed companies with different market forces by using the quasi natural experiment implemented by the new environmental protection law. The empirical study finds that, firstly, the implementation of the new environmental protection law significantly promotes the R & D innovation of enterprises; secondly, market power and enterprise innovation present an inverted "U"; Finally, market forces significantly inhibit the porter effect of the new environmental protection law.

Key words: environmental regulation, market power, porter effect, R&D