Abstract
The purpose of this study is to explore how and under what conditions business-to-government (B2G) relationship emphasis (i.e., firms’ dependence on government customers for revenue) affects firm green innovation. Using a sample of publicly listed Chinese firms that received at least one government contract during 2007–2020, we find a U-shaped relationship between B2G relationship emphasis and firm green innovation. Furthermore, our results show that a focus on value appropriation rather than value creation positively moderates the relationship between B2G relationship emphasis and firm green innovation. We also find that increased operational capability can steepen the relationship between B2G relationship emphasis and firm green innovation. This is the first attempt to explore government client role in firm green innovation, and its findings provide recommendations for integrating both external influence and internal determinism on green innovation.
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