Does green innovation promote trade credit activities? New empirical evidence from BRICS

Abstract

In the recent wake of the Sustainable Development Goals introduced by the United Nations, the topic of green innovation has achieved much attention. This study aims to explore the impact of green innovation on trade credit activities. The empirical analysis was conducted by sampling ten years of financial data (2010–2019) of publicly listed enterprises in Brazil, Russia, India, China, and South Africa. To overcome endogeneity, we utilize the system generalized method of moments technique for regression analysis. The empirical analysis reveals that green innovation has a positive and statistically significant relationship with both trade receivables and trade payables. The analysis offers a valuable reference for devising multiple policies on environmental sustainability and the management of trade credit activities. This study enriches the literature by highlighting the propensity of green innovation in trade credit activities.