Can political capital drive corporate green innovation? Lessons from China

Abstract

Abstract This article provides empirical evidence on how the pressures of corporate political capital and stakeholders' affect firms' willingness to embrace green innovation. Using a theoretical framework combining the stakeholder theory with the resource-based views (RBV), we investigate the effects of firms' political capital and stakeholders' pressures on corporate green innovation using a survey to 791 private manufacturing firms in China. Our results reveal that: (1) political capital plays a significant but negative role in firms' green product and process innovation performance; (2) both regulations and suppliers positively promote green innovation in product and process; (3) consumers are positively related to green product innovation but negatively related to green process innovation; and (4) competitions do not have any significant effects on both green product and green process innovation. Furthermore, political factors and stakeholders' contingent roles in institutional context should synthetically be considered to initiate green innovation.