| Summary: | With the increasing demand for a green economy and energy transition, firms, as the main players in the market, should focus on sustainable business models. The paper incorporates business strategy into a logical analytical framework to explore the impact of the LCCP program in China on firm R&D manipulation and related mechanisms. The findings indicate that the LCCP program significantly mitigates firm R&D manipulation. Moreover, the mitigating effect of the LCCP program has a more significant effect on R&D manipulation by private firms than by SOEs. The LCCP program, as a comprehensive environmental policy, effectively influences firm behaviour in sustainable business models. Our findings provide empirical evidence for policymakers.
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