Abstract
This paper examines how different categories of institutional investors influence green innovation for Chinese-listed companies and investigates the impact of digital transformation on this relationship. Results show that pressure-insensitive investors significantly improve corporate green innovation, while pressure-sensitive institutions have no effect. Further evidence suggests this is due to the negative impact of long-term pressure-sensitive investors on green innovation. We further analyze whether digital transformation affects the relationship between institutional ownership heterogeneity and green innovation. Consistent with the view that digital transformation promotes timely information dissemination and alleviates information asymmetry, our findings demonstrate that both pressure-insensitive institutional investors and short-term pressure-sensitive institutional investors promote green innovation in firms with higher levels of digital transformation. Further analyses reveal that digital transformation at the city level amplifies the influence of institutional investors on green innovation, and the underlying technology architecture provides more value to the institutional ownership heterogeneity−green innovation nexus.
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