*3.1. Modeling*

The experimental analysis in this paper is based on the following theoretical framework, as shown in Figure 1.

**Figure 1.** Conceptual framework.

First, the paper tests the effects of environmental regulations and resource endowments on sustainable growth using the following model:

$$SG\_{it} = \mathfrak{a}\_0 + \mathfrak{a}\_1 ER\_{it} + \mathfrak{a}\_2 RE\_{it} + \mathfrak{a}\_3 C tr l\_{it} + \theta\_{it} \tag{1}$$

$$\text{Ctrl}\_{it} = AT\_{it} + HHI\_{it} + FDI\_{it} + FS\_{it} + LEV\_{it} + PPE\_{it} \tag{2}$$

To measure the impact of environmental regulation on sustainable growth under the moderating effect of resource endowments, Equations (1) and (2) are further extended in this paper as follows.

$$SG\_{it} = \beta\_0 + \beta\_1 RE\_{it} + \beta\_2 Ctrl\_{it} + \mu\_{it} \tag{3}$$

$$SG\_{it} = \gamma\_0 + \gamma\_1 ER\_{it} + \gamma\_2 RE\_{it} + \gamma\_3 ER\_{it} \times RE\_{it} + \gamma\_4 C tr l\_{it} + \varepsilon\_{it} \tag{4}$$

where Equation (3) measures the effect of resource endowment per se on sustainable growth, and Equation (4) measures the effect of resource endowment on the relationship between environmental regulation and sustainable growth. Where *i* and *t* stand for listed businesses and time periods, respectively. The dependent variable *SG* stands for long-term growth. Environmental regulation is represented by *ERs*, resource endowment is represented by *RE*, and the moderating influence of resource endowment on environmental regulation and sustainable growth is represented by *ER* × *RE*. We have also added some important control variables represented by *Ctrl*, such as asset turnover (*AT*), the Herfindahl–Hirschman Index (*HHI*), foreign direct investment (*FDI*), firm size (*FS*), leverage (*LEV*), property, plant, and equipment (*PPE*), etc.

*α*0, *β*<sup>0</sup> and *γ*<sup>0</sup> are constant term. *α*1, *α*2, *α*3, *β*1, *β*2, *β*<sup>3</sup> and *γ*1, *γ*2, *γ*3, *γ*<sup>4</sup> are estimated coefficients of the independent variable, the moderator variable, and the cross multiplication of the independent variable and the moderator variable, respectively. *θit*, *μit* and *εit* represent the random disturbance terms. In this paper, the panel data model is used to estimate the coefficients.

#### *3.2. Variables*

#### 3.2.1. Sustainable Growth (*SG*)

Sustainable growth (*SG*) is the result of a set of activities in the business process, including two dimensions: sustainable business growth potential, and sustainable business profitability. The capital approach to sustainable growth is known to be useful in explaining sustainable development.

This paper uses the sustainable growth rate as proposed by Javeed et al. (2020b) to measure *SG* [14].
