Green Innovation Capability Research Articles

The masking effect of green innovation: A study based on carbon market shocks

Previous empirical evidence indicates that the carbon market exerts a positive influence on the performance of corporate green innovation. In light of the proposition that there are differences in the green innovation capabilities of firms, we propose a masking effect hypothesis which suggests that the carbon market does, in fact, improve firms' green innovation performance at the overall level. However, separately, this improvement effect is only observed for high-capability firms, and not for ordinary firms. We test the hypothesis and explore the potential mechanism. The results show that, firstly, the outstanding green innovation performance of high-capability firms leads to a masking effect, which is robust to different estimation methods and variable settings. Secondly, the high innovation capability increases the positive effect of the carbon market on green innovation, irrespective of whether the capability is brown or green, which means a weak version of the masking effect. Finally, the different propensities towards co-innovation lead to the masking effect.

Artificial Intelligence Adoption and Corporate Green Innovation Capability

Artificial Intelligence Adoption and Corporate Green Innovation Capability

How does green manufacturing enhance corporate ESG performance? — Empirical evidence from machine learning and text analysis

Green manufacturing, widely recognized as a crucial avenue for companies to achieve sustainable competitive advantages, exerts significant spillover effects on both environmental protection and social responsibility. Accordingly, this can significantly enhance corporate Environmental, Social, and Governance (ESG) practices and enhance overall ESG performance. This study focuses on Chinese A-share listed firms between 2009 and 2022, characterizing their ESG performance. Employing quasi-natural experimental methods, this research evaluates the causal relationships and specific channels through which green manufacturing enhances corporate ESG performance. The findings demonstrate that green manufacturing significantly empowers companies to strengthen their ESG performance. Channel analysis indicates that enhanced green innovation capabilities and the reduction of financing constraints constitute two critical channels through which green manufacturing facilitates ESG performance improvement. Further analysis indicates that all three subsystems in the green manufacturing system significantly empower companies to enhance ESG performance to varying degrees, with the most significant empowerment effect observed in the environmental dimension of ESG performance. The analysis below indicates that the enhancement of corporate ESG performance yields dual benefits, reflected in both economic gains and reputational enhancements.

Congruence and Discrepancy: Matching Effect of Searching and Integration on Green Product Development Performance

The development of green products in manufacturing enterprises is challenged by limited independent innovation capabilities and insufficient green technology. Based on knowledge-based theory, this study investigates the influence of boundary-spanning green technology search (BGTS) and technology integration capability (TIC) on green product development performance (GPDP). Using polynomial regression analysis with response surface methodology (PRA with RSM) on data from 341 companies, the following findings were obtained: (1) Higher levels of BGTS and TIC congruence are associated with higher GPDP compared to lower levels of congruence. (2) The degree of discrepancy between the BGTS and TIC has an inverted U-shaped relationship with GPDP. (3) GPDP is higher in the “low BGTS–high TIC” combination than in the “high BGTS–low TIC” combination. (4) Green technology innovation capability mediates the relationship between BGTS-TIC congruence and GPDP. (5) Strategic foresight positively moderates the relationship between the BGTS-TIC congruence and green technology innovation capability. These findings enrich the research content of organizational search theory, deepen the research of green technology innovation, expand research on the development of green products, and provide a decision-making reference for manufacturing enterprises’ green transition practices.

The Levels of Government Environmental Attention and Enterprises’ Green Technological Innovation

This study utilizes data from listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2023 and employs text analysis methods to investigate the impact of government environmental concerns on corporate green technology innovation and its underlying impact mechanisms. The empirical findings demonstrate that heightened government environmental concerns significantly foster corporate green technology innovation. This relationship remains robust across a series of sensitivity analyses. The impact mechanism analysis reveals that increased government environmental concern leads to a heightened intensity of environmental regulation, drives the intelligent transformation of enterprises, and enhances the implementation of corporate environmental strategies, collectively contributing to the improvement of corporate green technology innovation capabilities. Furthermore, the heterogeneity analysis indicates that the effect of government environmental concerns is more pronounced in state-owned enterprises, mature enterprises, and industries with lower pollution levels. This study underscores that the government’s intensified focus on environmental issues can effectively promote corporate green technology innovation, thereby promoting sustainable economic and social development and supporting the dual goals of environmental protection and economic growth.

Modeling the significance of corporate social responsibility on green capabilities and sustainability performance

This study examines the complex interplay among corporate social responsibility (CSR), green dynamic capabilities, green innovation capabilities, and organizations' economic, environmental, and social performance in the current era of innovation and sustainability. The proposed framework was tested using data from 634 medium- and large-sized Chinese manufacturing firms. Partial least squares structural equation modeling was employed to analyze the data. The findings demonstrate that CSR to external and internal stakeholders positively influences green dynamic capabilities. Meanwhile, CSR to external stakeholders and green dynamic capabilities are positively associated with green innovation capabilities, subsequently influencing the economic, environmental, and social performance of manufacturing firms. Moreover, the results reveal the mediating effect of green dynamic capabilities on the association between CSR and green innovation capabilities. Green innovation capabilities also mediate the association between CSR to external stakeholders and green dynamic capabilities on manufacturing organizations’ economic, environmental, and social performance. This study offers a novel exploration of the intricate interplay among CSR, green dynamic capabilities, green innovation capabilities, and organizational performance within manufacturing organizations. These findings provide valuable insights for managers and offer opportunities for further research that will ultimately contribute to a deeper understanding of the roles of sustainability and innovation in modern corporations.

Digital Transformation on Corporate Environmental Performance

Digital transformation, as a powerful catalyst for the deep integration of the digital economy and the real economy, has emerged as a crucial driver for enterprise transformation and upgrading, as well as reshaping the competitive landscape. Drawing on data from Chinese A-share listed companies between 2010 and 2019, this study empirically examines the relationship between digital transformation and corporate environmental performance, as well as its underlying impact mechanisms. The findings indicate that digital transformation significantly enhances the level of corporate environmental performance. Moreover, corporate digital transformation facilitates the improvement of environmental performance by enhancing green technology innovation capabilities and optimizing production structures. The positive impact on environmental performance is particularly pronounced in state-owned enterprises, high-growth companies, those with substantial research and development investments, and those garnering high analyst attention.

GreenCompass - A self-assessment tool for fostering integration of green skills

In today's ever-evolving landscape, fostering green skills emerges as a paramount endeavour, a beacon of progress towards a green(er) future. Within this transformative journey, this paper unveils a blueprint for organizations and institutions seeking to embrace a green future. The Self-Assessment Tool, GreenCompass, emerges as a pivotal cornerstone of this research, designed to quantitatively assess the green innovation capabilities of VET organizations. This tool offers a comprehensive view of an organization's readiness and potential for fostering green skills for green innovation. The paper further unveils the insights garnered from the extensive pilot-testing of the GreenCompass across diverse geographical regions and within various types of vocational education and training institutions, validating its applicability for a broad spectrum of settings. In the last part, the paper emphasizes the creation of an environment, a nurturing environment wherein green skills can thrive. It's a conceptual framework dedicated to facilitating the growth of a sustainable and green mindset, in alignment with the evolving dynamics of the green transition. This journey underscores the significance of a comprehensive methodology, one that begins with self-assessment, evolves through empirical validation, and culminates in the establishment of an environment to nurture green innovation. Ultimately, this multifaceted approach propels organizations towards a future characterized by innovation, sustainability, and an un-wavering commitment to a greener, more eco-conscious world.

Application of thermal energy optimization based on improved neural network algorithm in green innovation capability evaluation of manufacturing enterprises

As the global focus on sustainable development continues to increase, manufacturing companies face the dual challenges of energy efficiency and environmental impact in the process of enhancing green innovation capabilities. The purpose of this study is to explore the application of improved neural network algorithm in thermal energy optimization, so as to improve the green innovation ability of manufacturing enterprises and promote their sustainable development. By constructing an improved neural network model and using big data analysis technology, this paper conducts in-depth analysis of thermal energy use in manufacturing enterprises, so as to identify and optimize energy consumption patterns. The study considered a variety of influencing factors, including equipment efficiency, production process and environmental policy, and evaluated the optimization effect through model training and testing. The experimental results show that the improved neural network algorithm can effectively identify thermal energy waste points, and put forward the corresponding optimization measures. After optimization, the energy use efficiency of manufacturing enterprises has been improved, carbon emissions have been significantly reduced, and the comprehensive evaluation score of green innovation ability has been improved, providing effective technical support for promoting the sustainable development of enterprises.

“Crowding Out” or “Reservoir Effect”? Unraveling the Impact of Financialization on Green Innovation in Heavy Polluting Enterprises: Evidence from China’s Listed Companies

In the era of green transformation and sustainable development, green innovation has become a key force driving the greenization of the economy and society, as well as achieving global sustainable development goals. This study aims to investigate the impact of financialization on green innovation in heavy polluting enterprises, a sector where enhancing green innovation capabilities is crucial for both industry transformation and sustained economic growth. As the financialization of enterprises deepens, its effects on green innovation become increasingly significant. Based on data from 667 listed companies in China, we explore the mechanisms through which financialization influences green innovation. Our findings reveal that financialization has both a potential “reservoir” effect, which provides financial support for green innovation, and a significant “crowding out” effect, with the latter outweighing the former, thereby suppressing investment in green innovation. Further analysis indicates that these effects exhibit significant heterogeneity across different property rights, regions, and corporate debt-to-asset ratios. Additionally, the short-term debt-paying ability of enterprises and market competitiveness play important regulatory and threshold roles in this relationship. This study not only provides a new perspective for understanding the relationship between the financialization of heavy polluting enterprises and green innovation but also offers valuable insights for promoting the coordinated development of both and addressing the challenges of green innovation.

Is urban innovation capacity shaping new models of economic development? Evidence from the circular economy

AbstractCircular economy (CE) theory emphasizes that following the reduction, reuse, and recycling (3R) principles can promote the practice of the CE; at the same time, innovative technologies support the feasibility of these principles. However, in academia, it remains unknown whether innovative technologies can be used to effectively implement CE theory. This study estimates the CE performance of 280 cities in China using the super‐efficiency SBM–data envelopment analysis (DEA) model and analyzes the relationship between urban innovation capability (UIC) and the CE using a two‐way fixed‐effects model. The research findings are as follows: First, UIC enhances the CE performance. Second, unlike in green finance, when inclusive finance reaches a certain threshold, the promoting effect of UIC becomes stronger. Third, UIC has both a positive direct effect (local cities) and an indirect effect (neighboring cities). Mechanism tests on improving people's livelihoods, strengthening clean energy development, optimizing industrial structure, and improving agricultural productivity can explain these two effects. Finally, compared with general innovation, the impact of green innovation capability is greater, especially when it comes to green invention innovation. In addition, an innovation‐driven CE shows significant results in terms of carbon reduction and household income. This study theoretically and empirically confirms the driving force of innovation in the CE, providing favorable policy suggestions for countries facing economic transformation, such as China.

Does digital economy keep enterprises out of green innovation trouble? evidence from "double carbon" goal.

The proposal of the "dual carbon" targets has provided direction for promoting China's economic green transformation and green innovation. As enterprises are important entities driving technological innovation in China, enhancing their green innovation capabilities holds significant practical significance for reducing carbon emissions. While the flourishing development of the digital economy currently provides new avenues and impetus for enterprise green innovation, research on the micro-level effects of green innovation driven by digital economy is still lacking. Therefore, based on data from Chinese cities spanning 2010 to 2021 and micro-level data of listed enterprises, this paper employs fixed effect model and intermediary effect model to empirically test the effect and mechanism of urban digital economy development on the quality and quantity of enterprise green innovation. Additionally, it investigates the carbon emission reduction effect resulting from digital economy development. The findings are as follows: (1) The development of digital economy exhibits a significant green innovation effect, effectively enhancing both the "quality and quantity" of enterprise green innovation. Particularly noteworthy is its impact on the quality of green innovation in enterprises, a result corroborated by several robustness tests. (2) Promoting regional knowledge spillover and alleviating enterprise financing constraints emerge as mechanisms through which the digital economy enhances the "quality and quantity" of enterprise green innovation. (3) Heterogeneity testing reveals that the digital economy exerts a greater green innovation effect on enterprises located in regions characterized by higher environmental regulations, high-tech industries, and state-owned enterprises. (4) Further analysis demonstrates that the digital economy effectively reduces enterprises carbon emissions and enhances their carbon performance by driving green innovation, thus providing endogenous impetus for achieving the "dual carbon" goals. By examining the effects and mechanisms of green innovation driven by digital economy from the perspectives of promoting knowledge spillover and alleviating financing constraints, this study enriches theoretical research on the relationship between the digital economy and green innovation at the enterprise micro-level. It offers new insights for governments in formulating green innovation policies and serves as a reference for green innovation decision-making in other developing countries.

Digital Finance, Research and Development Investment, and Corporate Green Technology Innovation

The development of digital finance is anticipated to alleviate the dilemma of corporate green technology innovation. This study selects manufacturing enterprises that are publicly listed on the Shanghai and Shenzhen stock exchanges as well as the Growth Enterprise Market in China, as research samples, of which the data spans from 2011 to 2020. An empirical research using a matched dataset of this period demonstrates that the growth of digital finance has a significantly positive impact on the promotion of green technology innovation in Chinese manufacturing companies. This result remains valid even after conducting rigorous testing to ensure its reliability and taking into account the potential influence of endogeneity. Moreover, this promoting effect exhibits heterogeneity due to differences in enterprise size and property rights. In the future, governments, financial institutions, and enterprises should collaborate to promote the improvement of digital finance infrastructure, bolster policies and financial support for enterprise green technology research and development (R&D) investment, and effectively foster the improvement of corporate green technology innovation capabilities.

ESG performance and green innovation in new energy enterprises: Does institutional environment matter?

As the demand for sustainable production grows across Chinese society, heightened attention is being paid to new energy enterprises with superior green innovation capabilities in the current environment. Given the considerable importance of environmental, social and governance (ESG) performance to business operations, we use a sample of 192 Chinese A-share listed new energy enterprises from 2009 to 2022 to investigate the impact of ESG performance on green innovation from the institutional environment perspective. The empirical findings indicate that ESG performance and the institutional environment significantly contribute to facilitating new energy enterprises’ green innovation and the institutional environment can strengthen the promoting effect of ESG performance on green innovation. In addition, ESG performance and the institutional environment can have a significant influence on promoting green innovation in non-state-owned enterprises and new energy enterprises of all sizes, while the moderating effect of the institutional environment only has a positive influence on non-state-owned and large new energy enterprises. Finally, comparing the discrepancy between new energy enterprises’ substantive and strategic green innovation, ESG performance, institutional environment and its optimisation effect tend towards the former.

Does green innovation promote the status of supply chain? Evidence from listed Chinese companies

At the enterprise level, green innovation capability plays a crucial role in enhancing competitiveness within the supply chain. Enterprises leverage their green innovation resources to gain a stronger foothold in production competition. Drawing on data from listed enterprises in China, the findings support the notion that green innovation ability can enhance supply chain positioning, while also highlighting heterogeneity among different green innovation resources. Furthermore, we elucidate the mechanism through which value co-creation contributes to supply chain performance and how collaborative green innovation within the supply chain promotes its competitiveness. Additionally, our research reveals a lag effect associated with green innovation capability and demonstrates that the positive impact of green innovation capability is significantly regulated by asset-liability ratios. Consequently, this study suggests that enterprises should allocate more resources towards cultivating talent for driving both establishing partnerships within the supply chain and improving their position within the supply chain.

A study of the impact of digital transformation on corporate green innovation——Based on the Financing Constraints Perspective

Against the backdrop of a booming digital economy and green and low-carbon becoming the main theme of the times, this paper empirically explores how digital transformation affects and enhances the green innovation capability of enterprises based on the data of A-share listed companies in Shanghai and Shenzhen from 2018 to 2022. The possible mediating role of financing constraints in this process is deeply analyzed. The findings show that digital transformation significantly promotes the development of green innovation in enterprises, and this positive effect is more prominent in non-state-owned enterprises and mature enterprises. Further exploration shows that financing constraints play a partial mediating role between digital transformation and green innovation. Combining the findings, this paper makes recommendations at the enterprise and government levels, respectively: first, enterprises should actively participate in digital transformation and strive to enhance green innovation by alleviating financing constraints. Second, the government should continue to optimize the subsidy policy to provide stronger support for enterprises' green innovation, and then promote the sustainable enhancement of green innovation in the whole society.

Environmental liability insurance, green innovation, and mediation effect study

This paper begins by establishing a three-party game model involving three key players: the insurer, the firm, and the government. This model is used to analyze the utility of each party in various scenarios, one of which encourages green innovation within the firm. According to this model, when the insurer rejects insurance coverage and the government maintains a neutral stance on environmental liability insurance, the firm may opt to engage in green innovation. Green innovation fundamentally serves as a mechanism to mitigate environmental pollution risks stemming from the firm’s operational processes. In cases where the insurer declines underwriting, it becomes rational for the firm to enhance its risk management through green innovation, which can be viewed as a mitigating factor in the context of environmental liability insurance. To comprehensively examine the overall impact of environmental liability insurance on the green innovation endeavors of firms, we use a mediation effect model utilizing firm-level data from heavily polluting industries. This paper delves into the intricate relationship between environmental liability insurance and the capacity of heavily polluting firms to engage in green innovation, along with the mediating influence of financing constraints between these two factors. The findings of this analysis suggest that the acquisition of environmental liability insurance enhances the green innovation capabilities of firms operating in heavily polluting industries by alleviating financing constraints, serving as a mediating factor in this regard.

Can the new energy demonstration city policy promote corporate green innovation capability?

New energy demonstration city (NEDC) projects are significantly driving changes in energy structures and sustainable economic development. Corporate green technology innovation is key to achieving an alternative to our current energy use. To explore whether the NEDC project can help to improve companies' green innovation capabilities, this paper presents the dual differential model (DID) to conduct empirical research on panel data in 285 prefecture-level and above cities in China from 2008 to 2020. The DID model is arguably the most adequate for addressing the issue of endogenous problems. The research shows that the NEDC project has improved corporate green innovation capability; the findings of mechanism analysis show that NEDC projects have incited an upgrading of the local urban industrial structure and thereby improved corporate green innovation. The policy effect of NEDC projects obviously shows “insufficient momentum”; the heterogeneity test found that the promotion effect of NEDC projects for corporate green innovation in eastern cities, major cities, large-scale companies and energy-dependent industries is more significant. Based on the conclusions and heterogeneous characteristics for promoting corporate green innovation capability, the government should roll out further NEDC projects in a systematic way and more closely monitor the quality of such new energy demonstration cities.

The Expansion of Central Bank Collateral and Green Innovation of Enterprises

This article takes the policy event of green bonds being included in the MLF (Medium Term Lending Facility) qualified collateral framework in June 2018 as a quasi natural experiment, and analyzes the impact of the expansion of the collateral framework of the new monetary policy on the credit spread of green bonds and the green innovation output of enterprises issuing green bonds based on a two period and multi period double difference model. The research results indicate that, firstly, the expansion of collateral by the central bank will significantly reduce the credit spread of green bonds and lower the financing costs of enterprises. Secondly, the expansion of collateral by the central bank will promote the improvement of green technology innovation capabilities of green enterprises, and alleviate their financing problems by issuing green bonds and green bonds themselves.

The Influencing Mechanism of Managerial Myopic Behavior on Enterprise Sustainable Development Performance: Evidence Based on Listed Companies in China

Corporate sustainability is a key concern in today’s world. This research examines the relationship between managerial myopic behavior and corporate sustainability performance in Chinese A-share listed companies from 2013 to 2022. Based on behavioral finance theory and time orientation theory, our research provides novel insights into how time preference in managerial decisions significantly affects corporate sustainable development. We also investigate how myopic behavior by managers can adversely affect a company’s sustainable development performance. Using a robust dataset, we describe the mechanisms by which managers’ myopic behavior affects sustainability performance, especially in two aspects: financialization of assets and green innovation capability. The results of our research show the following: (1) managers’ myopic behavior adversely affects corporate sustainability performance; (2) asset financialization and green innovation capability play mediating roles; and (3) unlike the findings of the existing research, this study found that the linear moderating effect of media attention plays a significant “inverted U-shaped” moderating role in the relationship between the two influences.