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Political risk of green public procurement and firms' green innovation

Author

Listed:
  • Wang, Jiaxin
  • Huang, Xiang
  • Liu, Chengxin
  • Sun, Di
  • Song, Zilong

Abstract

This paper examines the relation between the political risk of green public procurement and green innovation. Using government leadership change as a research setting, we find that political risk in GPP impedes firms’ green innovation. Moreover, firms that rely more on external financing for green innovation are more vulnerable to this risk. Furthermore, the inhibitory effect of political risk in GPP positively varies with the firm's property right affiliation. Overall, we can conclude that government clients are not entirely low-risk for firms’ green transition.

Suggested Citation

  • Wang, Jiaxin & Huang, Xiang & Liu, Chengxin & Sun, Di & Song, Zilong, 2024. "Political risk of green public procurement and firms' green innovation," Finance Research Letters, Elsevier, vol. 62(PB).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002654
    DOI: 10.1016/j.frl.2024.105235
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    More about this item

    Keywords

    Green public procurement; Political risk; Green innovation; Green credit;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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