Science and technology finance policy, green innovation and corporate ESG performance

The green transition journey: How digital platforms and AI capabilities drive green ambidexterity innovation, circular economy and sustainable performance

ABSTRACT Based on the agglomeration network perspective, this paper investigates the impact of robot application (RA) and agglomeration network (Aggn) on corporate green innovation (CGI) using data from Chinese A-share listed companies from 2011 to 2019. Research findings indicate that within a 30-kilometre effective spatial range, both RA and Aggn can effectively promote CGI. They primarily influence CGI through the technology spillover effect, the peer effect, information sharing, the scale economy effect and the factor allocation effect. Simultaneously, RA and Aggn exhibit synergistic promotional effects on CGI. This synergistic effect is more pronounced in heavily polluting firms. The contributions of this paper are threefold. First, we enrich the emerging literature on the economic consequences of corporate social networks by adopting an agglomeration network perspective, offering a novel lens for studying the effects of smart transformation. Second, we analyse the characteristics of Aggn from a social and spatial perspective, thereby expanding the boundaries of research on Aggn. Finally, this study delves into the underlying micro-mechanisms, providing micro-level evidence for pathways to enhance green innovation performance.

Strategic synergies of green transformational leadership and knowledge Management for Advancing Green Innovation and Sustainable Performance: A multi-path mediation approach

ABSTRACT As climate change intensifies, firms are increasingly expected to extend environmental responsibility across their supply chains. Green procurement, a core element of green supply chain practice, reduces carbon footprints by encouraging firms to source from environmentally superior suppliers. While existing studies have explored the impact of environmental regulation on green procurement, limited research has examined the role of green finance in shaping corporate procurement behaviour. Using panel data on 1,378 Chinese A-share listed firms from 2009 to 2021, this study examines the impact of green finance on firms’ green procurement by employing two-way fixed effects, instrumental variable (IV) methods, and a difference-in-differences (DID) design. The results indicate that green finance significantly promotes firms’ procurement from green suppliers. Mechanism analyses reveal that this effect operates by enhancing environmental awareness and alleviating financing constraints. Heterogeneity analysis shows stronger effects for firms in non-heavily polluting industries and regions with stricter environmental regulation. Furthermore, green procurement significantly improves firms’ green innovation performance. Overall, this study extends research on the economic consequences of green finance to the supply chain context. The findings suggest that policymakers should integrate green procurement criteria into green finance frameworks, and managers should leverage green finance to implement sustainable procurement practices.

Purpose: This study examines how green finance and green innovation affect the business performance of environmentally conscious SMEs in East Java, particularly emphasizing the mediating role of environmental sustainability in promoting improved business outcomes while fostering sustainability. Research Methodology: The PLS-SEM method was used to analyze the business performance of 150 environmentally conscious SMEs in East Java. Results: This study indicates that both green innovation and green funding have a positive and significant impact on business performance. Green finance improves operational efficiency and market competitiveness. Meanwhile, green innovation greatly enhances a company's reputation and customer satisfaction, and the relationship between green finance, green innovation, and business performance is mediated by environmental sustainability strategies Conclusions: The results show that SME company performance is shaped by a synergistic relationship. Sustainability methods improve corporate success by strengthening green financing and innovations. Limitations: This research is limited to 150 environmentally friendly batik SMEs in East Java; therefore, the results may not be generalizable to other industrial sectors or regions. Contributions: These findings have significant ramifications for politicians and business practitioners advocating the use of green finance and innovation to achieve commercial and environmental sustainability.

Corporate social responsibility, green human resource management, green innovation, and sustainable performance through bibliometric and systematic review

The accelerating global energy transition has substantially increased demand for critical minerals such as copper, nickel, and lithium, positioning mining firms as key actors in the decarbonization of energy systems. However, the expansion of mineral extraction raises important sustainability challenges because mining activities remain highly energy- and carbon-intensive. This study investigates whether green innovation can simultaneously improve environmental performance and financial performance in critical mineral mining firms and examines the moderating role of institutional governance. Using a balanced panel of 35 publicly listed mining companies from Australia, Canada, Chile, Brazil, and Indonesia over the period 2015–2024, the analysis applies fixed-effects panel regressions complemented by dynamic specifications and multiple robustness tests, including alternative variable definitions and System Generalized Method of Moments (GMM) estimation. The results show that green innovation significantly reduces carbon intensity, indicating that environmental investments in renewable energy integration, electrification, and process efficiency contribute to improving emissions performance in mining operations. Green innovation also enhances firm financial performance, although the benefits emerge gradually over time, suggesting delayed financial gains followed by long-term efficiency improvements. Furthermore, governance quality strengthens the positive relationship between green innovation and firm performance, highlighting the importance of institutional environments in shaping the economic returns of sustainability strategies. By providing firm-level evidence across major mineral-producing economies, this study contributes to the literature on critical minerals, environmental finance, and the institutional dimensions of the just energy transition.

ABSTRACT Enhancing the level of firms’ green innovation is a crucial pathway for upgrading the economic development mode and for promoting China's transition toward high-quality growth. The implementation of the new generation artificial intelligence (AI) industrial policy by the government plays an important role in strengthening firms’ green innovation capabilities. Using the establishment of China New Generation Artificial Intelligence Innovation and Development Pilot Zones as a proxy for the AI industrial policy, this paper conducts an empirical analysis based on panel data of Chinese A-share listed firms from 2010 to 2024, employing a staggered difference-in-differences (DID) model. The results show that the new generation AI industrial policy significantly enhances firms’ green innovation performance. Mechanism tests further demonstrate that the policy promotes green innovation by advancing AI technology adoption, improving R&D efficiency, and enhancing operating cash flow. Heterogeneity analysis reveals that the effect of the policy is more pronounced among firms with larger data assets and higher carbon emissions, while financing constraints weaken its effectiveness. In contrast, heterogeneous number of R&D personnel and geographic location do not significantly alter the policy's effectiveness.

A market-focused RBV on green product innovation: Detailing the relationships between market responsiveness, green product innovation and new product performance

ABSTRACT In the context of the energy transition, crossborder investment has emerged as a significant catalyst for the advancement of renewable energy sources. As cross‐border renewable energy investments continue to establish a more intricate global network, a country's performance in green innovation is influenced by two key factors: external investment linkages and its position within global value chains (GVCs). This study draws on network and GVC theories to map the structure of the global cross‐border renewable energy investment network and empirically test how countries' network positions and GVC segments relate to their green innovation performance. The analysis is based on a panel of 6983 investment projects from 2003 to 2023. The findings indicate that global cross‐border renewable energy investments exhibit a cohesive network with a pronounced core‐periphery structure, which varies significantly across GVC segments and reflects the uneven distribution of countries' positions within the network. Countries occupying different positions in the global network experience diverse effects of cross‐border renewable energy investment on green innovation. It has been demonstrated that those with greater node strength and richer structural holes generally achieve higher levels of green innovation output. However, these network advantages are not uniformly distributed across GVC segments. This study offers conceptual insights that contribute to the development of effective policies for cross‐border renewable energy investment and green innovation.

This study aims to analyze the effect of green technology adoption on business performance through product innovation in batik micro, small, and medium enterprises (MSMEs) in Lumajang Regency. A quantitative explanatory approach was employed. Data were collected through a structured questionnaire survey of 50 batik MSMEs selected using purposive sampling. Data were analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). that green technology adoption positively affects business performance and product innovation. Product innovation also positively influences business performance and partially mediates the relationship. These findings show that environmentally friendly technology improves operational efficiency and stimulates value-added product innovation. The novelty lies in examining product innovation as a mediating variable in batik MSMEs located in a non-industrial-center area. The originality is reflected in integrating green technology, product innovation, and business performance into a single mediation model using PLS-SEM. This study concludes that green technology adoption, supported by product innovation, significantly enhances batik MSMEs’ business performance.

Green innovation presents distinctive challenges, including technological uncertainty, regulatory complexity and diverse stakeholder demands, yet how firms access external knowledge and resources to overcome these barriers remains underexplored. This study investigates whether the positions that firms occupy within networks formed by shared independent directors influence corporate green innovation performance, using panel data from 7,253 Chinese A-share listed companies during 2013–2023. Employing social network analysis, propensity score matching and generalized method of moments (GMM) estimation, we find that firms with more extensive board connections and those serving as key bridges between otherwise unconnected companies achieve significantly higher green innovation outcomes. These effects are more pronounced in heavily polluted industries and among firms with lower baseline environmental, social and governance (ESG) performance. Further analysis reveals that director networks facilitate green innovation by alleviating financing constraints and reducing managerial short-term orientation. These findings demonstrate that independent directors create value beyond traditional monitoring functions through network-based knowledge transfer and resource mobilization, offering practical insights for board composition decisions in firms pursuing environmental transformation.

HRMARS - Purpose: To review the latest domestic and international research (past five years) on how different types of environmental regulation-command-and-control, market-based, and voluntary-affect green technological innovation and corporate sustainability, and to propose an integrated analytical framework for understanding these mechanisms. Methodology: This study conducts a systematic literature review, synthesizing theoretical and empirical findings related to the nonlinear, heterogeneous, and complementary effects of environmental regulation on green technology innovation and firm performance. Findings: Environmental regulation significantly influences green innovation through diverse and nonlinear mechanisms. Moderate regulation generates innovation compensation effects, while overly stringent enforcement may restrain R&D investment. Different regulatory tools also demonstrate complementarity. The study proposes a multi-mechanism analytical framework and identifies future research directions related to digital governance, social equity, and institutional coordination. Research limitations: As a literature review focused on the past five years, the findings may be constrained by the scope of available studies and the evolving nature of environmental policies. Future research should further explore cross-regional heterogeneity and long-term dynamic impacts. Practical implications: Insights from the review help inform China’s effort to construct a balanced and efficient environmental regulatory system, offering guidance for improving green transition governance via digital tools, inclusive policy design, and coordinated institutional arrangements. Originality: This paper provides a comprehensive and updated synthesis of recent research, highlights the complementary mechanisms of varied regulatory tools, and introduces an integrated analytical framework that enriches the theoretical understanding of how environmental regulation shapes green innovation and corporate sustainability.

ABSTRACT Building on the information-processing perspective and contingency theory, this study investigates how the complexity of green innovation influences performance. It also examines how aligning green innovation complexity with appropriate governance mechanisms can improve innovation outcomes. The empirical analysis reveals a curvilinear relationship between green innovation complexity and performance. Additionally, this study finds that administrative governance is more effective in boosting performance for low-complexity innovations, while relational governance works better for high-complexity innovations. This research provides theoretical contributions for future research on structural contingencies affecting innovation performance by developing a conceptual framework showing how different governance modes shape innovation outcomes. For practitioners, the findings highlight the importance of aligning governance with innovation complexity to maximise performance, offering practical steps to enhance green innovation and meet stakeholders’ sustainability expectations.

Environmental tax is a key market-based instrument for promoting sustainability and reshaping corporate strategy. Using the panel data of Chinese listed firms from 2010 to 2023, this study employs text mining to measure digital transformation and examines the impact of environmental tax on corporate digitalization. The results show that environmental tax significantly promotes digital transformation. The mechanism analyses reveal that green technology innovation and ESG performance serve as important transmission channels. Furthermore, the effect is positively moderated by regional marketization, environmental information disclosure, and low-carbon city policies. The heterogeneity analyses indicate stronger effects in economically developed regions and firms with greater resource endowments. The additional analysis demonstrates that environmental tax enhances both total factor productivity and green governance performance through accelerating digital transformation, achieving a synergistic green–digital transition. This study provides empirical evidence on how market-based environmental policies can foster corporate digital transformation as a pathway toward sustainable development.

Environmental sustainability increasingly requires that firms adopt green innovation (GI) to balance their strategy for ecological protection with financial performance. However, the role of employee education in shaping this relationship remains ambivalent. Drawing on the World Bank Enterprise Survey, which covers 8941 firms across 42 countries, we employ a two-stage least squares approach to estimate these effects. Results show that GI improves overall financial performance, though the effect is insignificant in knowledge-intensive business services and among Asian firms. Strikingly, we uncover a “less is more” dynamic that challenges proportionality assumptions in human capital theory: GI's financial performance benefits are strongest at low levels of formal employee education and decline to negligible effects as education increases. This pattern is most pronounced in low-tech manufacturing, among European firms, and in large organizations. Extending absorptive capacity theory to sustainability, this suggests that practical, adaptive skills outweigh theoretical knowledge in translating GI into performance gains. We recommend that firms balance formal education with experiential learning and hands-on implementation skills to enhance GI performance.

Drawing on Upper Echelons Theory and the Resource-Based View, this study investigates the impact of executives' green experience on corporate environmental performance (SCEP). Using a sample of Chinese A-share listed firms from 2016 to 2023, we measure SCEP by applying a machine learning-based sentiment analysis to corporate environmental news. Our findings indicate that executives with green experience significantly enhance SCEP, a result that remains robust after addressing endogeneity concerns and conducting a series of sensitivity checks. Mechanism analyses reveal that both substantive and symbolic green innovations serve as parallel yet complementary mediators in this relationship. Heterogeneity tests show that the positive effect is more pronounced in firms facing higher financing constraints and those located in large cities, whereas it is attenuated for heavy polluters and firms under stringent environmental pressure. Furthermore, while both green experience and improved SCEP are found to increase financial distress risk, the executives' green experience can effectively mitigate the adverse effect of SCEP on financial health. This study elucidates the channel through which executive characteristics translate into environmental performance via corporate news sentiment, providing robust empirical support for policy-making and sustainable corporate development. • Uses machine-learning and text analysis to measure corporate environmental performance via news. • Develops a novel framework integrating Upper Echelons Theory (core), the Resource-Based View (mechanism), and Institutional Theory (heterogeneity lens). • Enriches research on how executives with green experience shape corporate environmental performance. • Examines complementary roles of substantive versus symbolic green innovation. • Executives' green experience can mitigate the negative impact of corporate environmental performance on financial distress risk.

ABSTRACT This study investigates how green service innovation directly and indirectly influences sustainable corporate performance. Three hundred valid questionnaire responses are gathered from managers of Egyptian travel agencies to test 13 direct/indirect research hypotheses. Findings revealed significant direct impact of green entrepreneurial orientation, green creativity, green knowledge‐sharing, and green dynamic capabilities on green service innovation, and indirect effect on sustainable corporate performance. Overall, this research sheds light on a further interpretation of the key factors affecting green service innovation and sustainable corporate performance. Findings confirmed the mediation role of green service innovation and its contribution to sustainable corporate performance. This investigation provides insights into managers, service providers, and marketers to help maintain their agencies' competitive positions in the travel market and enhance their creativity and service innovation.

Purpose While the benefits of green competitive advantage (GCA) are now widely acknowledged, existing literature offers limited insights into the drivers of green human resource management (GHRM) and green innovation on GCA. This study aims to explore GHRM practices and green innovation influencing GCA and to rank the relative importance of these factors. Design/methodology/approach This study adopts a mixed-methods approach, combining qualitative and quantitative analyses. Data were collected from surveys of managers in Vietnam through three rounds of the Delphi method and the Analytic Hierarchy Process (AHP). Findings The findings of this study identified a comprehensive set of eight factors and 20 sub-factors contributing to GCA. The factors, ranked by importance, are: responsible leadership, training and development, selection and recruitment, green product innovation, green process innovation, employee involvement, compensation and reward and performance appraisal. The iterative survey process, combined with open-ended questions in each round and the increasing clarity technique, provided deeper insights and explanations of the results. Originality/value This study integrates the Ability–Motivation–Opportunity theory and the Resource-Based View into a single framework to compare and rank their relative importance for GCA. This research adopts an approach that has received relatively little attention in the existing literature, combining qualitative and quantitative methods to examine the topic from a managerial perspective, thereby providing deeper insights into the field.