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The green promotion back to digitization: Research on air quality, urban green coverage and digital innovation

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  • Yang, Danqin
  • Liang, Fangzhi
  • Qian, Yuhang

Abstract

We examine the relationship between air quality, urban green coverage, and the digital innovation of companies in this paper. Using a sample of Chinese A-share listed companies spanning from 2006 to 2016, we discover a positive effect of air quality on companies' digital innovation. Furthermore, urban green coverage enhances this positive relationship through the environmental effect and signaling effect. In mechanism analysis, we find that improved air quality correlates with digital investment attraction, digital human resource immigration, and digital R&D efficiency enhancement channels, subsequently contributing to the advancement of digital innovations among companies. The positive impact of air quality on digital innovation is particularly pronounced in non-state-owned enterprises and under stricter government air policy regulations. Additionally, our study shows that while air quality significantly boosts total innovation by enhancing digital innovation, it has a minimal effect on non-digital innovation. Our findings underscore the importance of paying attention to air quality and promoting green environmental initiatives in the digital era.

Suggested Citation

  • Yang, Danqin & Liang, Fangzhi & Qian, Yuhang, 2024. "The green promotion back to digitization: Research on air quality, urban green coverage and digital innovation," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005337
    DOI: 10.1016/j.irfa.2024.103601
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    More about this item

    Keywords

    Air quality; Urban green coverage; Digital innovation;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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