How does anti-corruption affect green innovation? Evidence from China

Abstract

This study investigates the impact of the anti-corruption campaign on listed companies’ green innovation in China. Using the difference-in-differences model, we find that firms located in regions with anti-corruption inspections have more green innovation, and this association still exists after a series of robustness tests. Moreover, the positive relationship is partially mediated by firms’ rent-seeking. In addition, we document that the influences are particularly significant in sub-samples with high levels of political connection. This study provides evidence of the advantage of anti-corruption from the perspective of corporate green innovation, which can be helpful for governments that strive to improve the green innovation of market entities through the anti-corruption channel.