Can analyst coverage improve green innovation?- Empirical research based on China’s heavy polluting enterprises

Abstract

Due to the externality of green innovation and the profit-seeking nature of capital, heavy polluting enterprises usually lack effective incentives for green innovation and ignore the long-term sustainable development. In order to explore the impact of analyst coverage on the green innovation, this paper establishes a fixed effects model using panel data of heavy polluting listed enterprises in China from 2015 to 2021. We find that the analyst coverage can significantly improve the green innovation of heavy polluting enterprises. Compared with state-owned enterprises, analyst coverage has a more significant improving effect on green innovation performance in private heavy polluting enterprises. Compared with enterprises in central and western regions, analyst coverage can better promote green innovation of heavy polluting enterprises in eastern regions. This study provides empirical evidence for the guiding role of analyst coverage on the sustainable development of heavy polluting enterprises.