Home-country climate regulation and strategic response of multinational enterprises: Investment relocation or green innovation?

Temperature change and industrial green innovation: Cost increasing or responsibility forcing?

Based on the provincial panel data from 2004 to 2019, this paper constructs a more comprehensive industrial structure upgrading coefficient and uses a moderated mediation model to verify the mechanism of OFDI reverse green innovation technology on industrial upgrading. It is found that OFDI has a reverse green technology innovation effect, which can positively promote China’s industrial upgrading. From the perspective of a moderated mediating effect, the increase of domestic R&D investment is conducive to shortening the technological gap with developed countries, and the enhancement of domestic environmental regulation also encourages multinational enterprises to implement green technology cooperation. Both of them strengthen the reverse green technology innovation effect of OFDI, and correspondingly have a greater promoting effect on the upgrading of industrial structure. The reverse green technology innovation of OFDI mainly promotes strategic green innovation of noninvention types, but the enhancement of R&D capability and the improvement of environmental regulation can strengthen the reverse substantive green innovation of OFDI. After endogenous processing and replacing the core explanatory variables, the results are still significant.

As a critical external mechanism driving green innovation, institutional and competitive pressure often coexist and jointly shape firms’ strategic responses. However, existing studies primarily focus on the individual effects of these pressures, with limited attention to their interactive impacts on green innovation. Drawing on optimal distinctiveness theory, this study proposes a “pressure–response” analytical framework that classifies institutional and competitive pressure combinations into congruent (i.e., high–high or low–low) and incongruent (i.e., high–low or low–high) pressure contexts based on their relative intensities. It further examines how these distinct configurations affect two types of green innovation: strategic green innovation (StrGI) and substantive green innovation (SubGI). Using panel data from Chinese A-share listed firms between 2010 and 2022, the empirical results reveal that under congruent pressure contexts, the alignment of institutional and competitive pressures tends to suppress green innovation. In contrast, under incongruent contexts, the misalignment between the two pressures significantly promotes green innovation. Regarding innovation motivation, the high institutional–low competitive pressure context more significantly promotes StrGI, while the low institutional–high competitive pressure context has a more prominent effect on SubGI. In addition, this study also investigates the mediating roles of StrGI and SubGI on ESG performance. The findings provide theoretical support and policy implications for improving green transition policies and institutional frameworks, as well as promoting sustainable corporate development.

The reverse spillover effect of the foreign expansion of multinational enterprises (MNEs) from emerging economies (EMNEs) on their green innovation in home countries have been largely ignored; by contrast, the main focus has been directed toward the spillover effect of MNEs from developed countries in emerging economies. The only related research available limits their analysis to the regional level, rendering the relationship between the foreign expansion of EMNEs and their green innovation unclear. Specifically, as an increasing foreign expansion strategy adopted by EMNEs, how do cross-border mergers and acquisitions (CBMAs) affect the post-merger green innovation of EMNEs? To examine this question and explore the boundary conditions, this study integrates institutional theory and the business ethics literature to construct a motivation–ability framework in the context of green innovation. Using the Propensity Score Matching with Difference-in-Difference (PSM–DID) method, we tested our hypotheses on a sample of Chinese listed manufacturing firms between 2009 and 2017. Results suggest that Chinese MNEs decrease their green innovation in response to CBMAs. Moreover, the CBMA–green innovation relationship varies across firms and is determined by heterogeneity in state ownership, government subsidies, and industry openness. These findings not only elucidate the reverse effect of the foreign expansion of EMNEs on their green innovation in home countries; they also provide an approach to reconciling mixed conclusions on the relationship between CBMAs by EMNEs and their innovation performance by clarifying types of innovation in international business research.

One of the most pressing concerns today is how to improve green innovation and supply chain management for company sustainability. It has been discovered that inefficient supply chain management is a major barrier limiting eco-friendly innovation. The supply chain management process is crucial to a company's long-term viability, yet previous research barely scratched the surface of its significance. This article uses a resource-based view to investigate how integrating green innovation and organizational agility into the supply chain management process contributes to the long-term success of businesses. This study used a cross-sectional approach. Structured equation modeling was used to examine data collected through convenience sampling from 475 employees of Chinese multinational manufacturing enterprises. Green innovation helps smooth over the bumps on the road between supply chain management and sustainable business results. Green innovation and business sustainable performance also benefit from organizational agility, which was not shown to moderate this relationship. The study teaches that in today's knowledge-based economy, firms that invest in novel technologies and adopt greener strategies are better able to address sensitive issues like supply chain management and organizational agility and achieve long-term success. This research aims to provide light on the complex interconnections between supply chain management, green innovation, and the sustainable performance of businesses. The theoretical framework for the present research was validated by the occurrence of a positive association between these variables.

Green innovation is a strategic choice for Chinese enterprises to achieve in balancing economic performance and environmental benefits. Environmental protection tax (EPT) is the first green tax in China. How to fully leverage the institutional dividends of environmental tax reform to achieve green innovation in enterprises is of great significance for the high-quality development of China's current economy. This study takes the levy of environmental protection taxes as the quasi-natural experiment and uses DID, DDD, PSM-DID and so on to verify the impact of EPT on green innovation. The results show that EPT can improve green innovation through the path of legitimacy pressure and legitimacy management. Notably, the effects are more obvious in enterprises with non-state-owned, low-financing constraints and located in the eastern region. Furthermore, green innovations under the push of environmental protection tax can improve long-term performance, while it has a negative effect on short-term performance. The levy of EPT has the dual dividend effect of economy and environment. Moreover, this study explores the source of the legitimacy pressure and the strategic response of enterprises and provides guidance for government's precise implementation of policies to optimize the role of EPT in green innovation.

Global climate change has caused a series of environmental problems, green technology innovation is necessitating strategic responses, but the impact of low-carbon city pilot policy on urban green technology innovation is unclear. Based on panel data from 285 Chinese cities during 2005-2022, this study employs the Difference in Difference method to examine the impact of low-carbon city policy on urban green technology innovation. The results show that (1) The low-carbon city pilot policy promotes urban green technology innovation. (2) The low-carbon city pilot policy promotes urban green technology innovation through government green input and public engagement. (3) New infrastructure enhances the impact of low-carbon city pilot policy on quantity of green technology innovation. (4) Compared with the Yangtze River Economic Belt, the low-carbon city policy has a greater influence on urban green technology innovation in the Yellow River Basin.The findings provide policy insights for the construction of low-carbon pilot cities.

This study examines the diverse environmental practices of multinational firms, the degree of digitalization among parent firms, and green innovation. Using data from multinational listed firms from 2007 to 2018 as a sample, this article uses regression analysis to show that the more widely distributed the subsidiaries of multinational firms, the more heterogeneous the environmental knowledge acquired by the parent firm. The more diverse the environmental practices, the worse the green innovation performance of the parent firm. The degree of digitalization of the parent firm can effectively mitigate this negative effect. The more digital the parent company is, the more quickly it can process the large amount of complex information that helps the parent firm to achieve green innovation. These findings provide a new perspective on innovation in firms.

The present study aims to analyze the influence of environmental uncertainty on a firm's environmental management accounting. Moreover, the current examination is also motivated to empirically investigate the relationship of environmental commitment, environmental management accounting and green innovation on firm performance. The current study is first in studying the joint impact of the studied variables in analyzing SMEs performance appraisals. In doing so, we applied PLS_SEM and the results of this methodology confirm that all selected variables have a positive and significant impact on environmental performance in except environmental uncertainty. Moreover, the outcomes of the PLS-SEM confirm that environmental commitment has a positive and significant impact on firm performance of multinational firms of Indonesia. Moreover, the results further suggested that environmental uncertainty have a negative and significant impact on firm performance. The results of PLS-SEM also confirm that green innovation and environmental management accounting have significantly and positively impact on firm performance. Technical speaking, the results confirm that green innovation and environmental commitment are the key contributors to enhance the firm performance of Indonesian multinational firms.Keywords: Environmental commitment, Green innovation, Firm performance, Indonesia.JEL Classifications: Q56, L25DOI: https://doi.org/10.32479/ijeep.9174

Substantive change or strategic response? Digital industrial convergence policy and urban green innovation

Green bonds: Fueling green innovation or just a fad?

Stricter regulations and intensifying market competition often cause firms to miss their environmental performance targets. However, the strategic responses of firms to these environmental shortfalls through green innovation remain underexplored. Using data of 2,164 Chinese industrial firms from 2007 to 2022, we apply the behavioural theory of the firm to argue that environmental performance shortfalls trigger both problemistic search and collaborative search through green patenting, particularly collaborative green patenting. Mediation analysis reveals that these effects are primarily driven by heightened executive environmental awareness and stronger industry–university–research collaboration. We also demonstrate that pollution-intensive firms rely more on collaborative green innovation, whereas financially constrained firms opt for independent patenting. By extending the behavioural theory of the firm to environmental performance, this study uncovers key drivers of green innovation and offers practical guidance for aligning innovation with sustainability goals.

As sustainability pressures intensify in the global banking industry, green innovation has emerged as a strategic response to mitigate environmental and social risks. However, implementing green innovation is inherently risky and largely depends on top executives' strategic orientation and structural power. This study examines the differential effects of CEO structural power, captured through CEO duality and CEO board membership, on banks' green innovation outcomes. Using an unbalanced panel of 714 global banking firms over the period 2014–2023, green innovation is proxied by the Environmental Pillar Score and the Environmental Innovation Score. The analysis employs baseline regressions (OLS, fixed effects, and random effects) alongside dynamic Generalized Method of Moments estimations to address potential endogeneity and panel dynamics. The findings indicate that CEO duality negatively affects both environmental innovation and overall environmental performance, suggesting that excessive power concentration weakens banks' environmental commitment. In contrast, CEO board membership positively affects environmental innovation activities but not aggregate environmental performance, suggesting that nondominant CEO involvement in governance can foster innovation‐oriented sustainability strategies.

With the increasing attention given to resource scarcity and environmental destruction, growing pressure is imposed upon MNEs (multinational enterprises) by a wide range of stakeholders to exert green innovation. Although an emerging body of research has explored the contributing factors of green innovation, little attention has been paid to the impact of internationalization, especially the different dimensions of internationalization, on green innovation performance. To address this research gap, this research aims to examine the role of both the breadth (geographical range) and depth (intensity) of internationalization on green innovation performance of MNEs, and investigate the moderating roles of MNEs' global dynamic management capability and absorptive capacity. Based on organizational learning theory, this study used secondary data from Chinese listed companies and established econometric models to test the proposed research framework. The results indicated that the breadth of internationalization could enhance MNEs' green innovation performance. Alternatively, the depth of internationalization could inhibit green innovation performance. In addition, the results also revealed that global dynamic managerial and absorptive capacities can both enhance the positive effect between internationalization breadth and green innovation performance while weakening the negative effect of internationalization depth on green innovation performance. This study has implications for strengthening our knowledge of green innovation performance as well as enhancing policy design for sustainable development.

While regional innovation centers (RICs) can encourage corporate green innovation, firms may opportunistically exaggerate their green innovation activities under RICs’ spatial influence, thereby engendering green innovation bubbles. We theorize that geographic proximity to RICs shapes these bubbles by influencing firms’ capability and motivation to exaggerate green outputs. The results indicate that (1) proximity to RICs exhibits an inverted U-shaped relationship with corporate green innovation bubbles; (2) green strategic orientation (GSO) positively moderates this relationship, steepening the inverted U-shaped curve among firms with higher GSO; and (3) political connections shift the peak of the curve, with bubble formation peaking and declining at greater geographic distances. Overall, this study enhances our understanding of geographic influences on green innovation from a strategic response perspective. Moreover, it highlights organizational heterogeneity’s role in shaping how firms interpret and respond to geographic influences.