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Asset redeployability and green innovation

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  • Do, Trung K.

Abstract

We present evidence that firms with greater asset redeployability are more likely to engage in green innovation activities, as measured by corporate green patents and citations. This finding supports the notion of funding flexibility and withstands numerous robustness and endogeneity tests. The relationship is particularly pronounced for firms facing high climate change uncertainty, as well as those in high-polluting industries. Moreover, we find further evidence that the pursuit of green innovation is associated with improved firm value over the long term. These insights shed light on how asset redeployability correlates with both innovation outcomes and firm performance within the context of green finance for sustainable development.

Suggested Citation

  • Do, Trung K., 2024. "Asset redeployability and green innovation," Journal of Financial Stability, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finsta:v:72:y:2024:i:c:s157230892400055x
    DOI: 10.1016/j.jfs.2024.101270
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    References listed on IDEAS

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    More about this item

    Keywords

    Asset redeployability; Green innovation; Financial constraint; Takeover threat; Firm value;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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