Can Executives’ Foreign Experience Promote Corporate Green Innovation? —Evidence from Chinese Energy Firms

Abstract

ABSTRACT Green innovation is an important driving force for energy firms to improve their competitive advantage and an important path to achieve the goals of “carbon neutrality” and “carbon peaking.” This paper examines whether and how executives’ foreign experience influences green innovation in Chinese energy firms. Using data on the foreign experience of executives, we discover that the foreign executives’ experience is positively correlated with corporate green innovation. Potential mechanisms analyses imply that enhancement of environmental ethics and comprehensive competency are two important channels by which foreign experience of executives influences green innovation. In addition, moderating effects indicate that the positive association between the foreign experience of executives and green innovation is dominant in energy firms with fewer financing constraints, state-owned energy firms, and firms with less market competition. Finally, we find that the positive impact of executives’ foreign experience on corporate green innovation is different in aspects such as the subindustries, whether executives have U.S. experience, length of stay abroad, the age of executives going abroad and positions, while there is no significant difference in different types of foreign experience. In summary, these results imply that executives’ foreign experience is a crucial factor in fostering green innovation of energy firms.