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Innovation with ecological sustainability: Does corporate environmental responsibility matter in green innovation?

Author

Listed:
  • Xiaoli Hao

    (School of Economics and Management, Xinjiang University, Urumqi, China)

  • Wenqian Fu

    (China Economics and Management Academy, Central University of Finance and Economics, Beijing, China)

  • Khaldoon Albitar

    (Faculty of Business and Law, University of Portsmouth, Portsmouth, United Kingdom)

Abstract

Green innovation, driven by China's new development concept, plays a crucial role in high-quality economic development. In line with the green development trend, businesses increasingly prioritize whether their corporate environmental responsibilities (CER) can effectively enhance corporate green innovation (CGI) levels. This paper examines the influence and mechanism of CER on CGI using a dynamic perspective, drawing from 1,640 manually-collected panel data of Shanghai and Shenzhen A-share listed companies between 2010 and 2017. The primary findings indicate that the impact of CER on CGI possesses phase-specific characteristics and a dual effect of "crowding in" and "crowding out." The current phase of CER negatively affects green innovation, while the lag phase has a positive effect. CER's impact on various CGI types is heterogeneous: specifically, it follows an "inverted-N" trajectory (inhibition-promotion-inhibition) for "strategic green innovation" and has a promotional effect on "substantive green innovation," which is stronger and has a longer time lag. The mechanism analysis reveals that financing constraints play a critical mediating role. A heterogeneity analysis based on multiple dimensions (ownership, industry, and location) suggests that CER has a more significant driving force for CGI among state-owned firms, high-polluting industries, and enterprises in inland areas. Finally, the paper presents corresponding suggestions for government and corporate entities.

Suggested Citation

  • Xiaoli Hao & Wenqian Fu & Khaldoon Albitar, 2023. "Innovation with ecological sustainability: Does corporate environmental responsibility matter in green innovation?," Journal of Economic Analysis, Anser Press, vol. 2(3), pages 21-42, May.
    • Handle: RePEc:bba:j00001:v:2:y:2023:i:3:p:21-42:d:43
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    References listed on IDEAS

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