Political connections and green innovation: The role of a corporate entrepreneurship strategy in state-owned enterprises

Abstract

A growing body of literature recognizes the critical impact of political connections on enterprises’ green innovation. This study enriches the literature by arguing that a corporate entrepreneurship strategy could plausibly have an unexamined mediating role between political connection and green innovation. By regressing the data of Chinese pollution-intensive companies from 2011 to 2019, the empirical results support this argument but only for state-owned enterprises. Politically connected SOEs promoted green patent authorizations through corporate entrepreneurship strategies. Furthermore, the results remained robust after a battery of checks. Notably, the higher the political connection level is, the more significant is the role. Political connections increased entrepreneurship investments in research and development and organizational capital, promoting green innovation in SOEs; therefore, policymakers could leverage the entrepreneurship investment effects of political connections to encourage SOEs’ green innovation.