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Will green innovation strategies trigger debt default risk? Evidence from listed companies in China

Author

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  • Wang, Xiaoqi
  • Guo, Yida
  • Fu, Shaozheng

Abstract

This paper empirically examines the effects of green innovation on corporate debt default risk using data from Chinese A-share listed companies spanning the years 2013 to 2021. The findings indicate that the adoption of a green innovation strategy by enterprises can elevate the risk of debt default. This heightened risk is attributed to over-investment behavior within green-innovating enterprises, which subsequently triggers corporate debt default risk. Notably, this effect is more pronounced in state-owned enterprises and markets characterized by high concentration. Management shareholding may be an effective preventive measure for mitigating corporate debt default risk in the context of green innovation strategies.

Suggested Citation

  • Wang, Xiaoqi & Guo, Yida & Fu, Shaozheng, 2024. "Will green innovation strategies trigger debt default risk? Evidence from listed companies in China," Finance Research Letters, Elsevier, vol. 62(PB).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002460
    DOI: 10.1016/j.frl.2024.105216
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