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Peer effects of corporate green innovation: Evidence from China's listed firms

Author

Listed:
  • Xu, Runxiang
  • He, Chao
  • Li, Yanxi
  • Kong, Lingwen

Abstract

We investigate how firms react to their industry and local peers’ commitment to and adoption of corporate green innovation (CGI). We find that in addition to the industry link, the peer effects of CGI also exist on the basis of geographic proximity. We further explore several channels through which the peer effects of CGI are motivated. We show that the industry peer effect of CGI is a response to competitive pressure and risk aversion, while the local peer effect of CGI is mainly driven by a firm's incentives to enhance green reputation. Our findings remain robust when using a spatial econometric model and considering nonlocal leading industry CGI portfolio and regional variations in sensitivities to macro shocks.

Suggested Citation

  • Xu, Runxiang & He, Chao & Li, Yanxi & Kong, Lingwen, 2024. "Peer effects of corporate green innovation: Evidence from China's listed firms," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000552
    DOI: 10.1016/j.frl.2024.105025
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    More about this item

    Keywords

    Green innovation; Peer effect; Competitive pressure; Green reputation;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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