Do more hands make work easier? Public supervision and corporate green innovation

In recent years, China's government has encouraged public citizens from all strata of society to participate in country governance errands to develop a ‘co-governance’ system. As environmental contamination problems worsen, the public has begun actively and voluntarily participating in supervising corporate environmental protection in China. Employing samples of China's A-share listed companies from 2009 to 2019, this study explores the impact of public supervision on corporate green innovation and the channels it goes through. Our main finding suggests that public supervision significantly improves corporate green innovation. Moreover, we find that the channel through which public supervision enhances corporate green innovation lies in urging local government to intensify environmental protection regulations. Additionally, public supervision's effect on green innovation is more pronounced among firms located in areas where local authorities face less fiscal pressure, firms that attract more media attention, and large firms. Finally, we show that the positive outcome of corporate green innovation is that it increases corporate value in the long run, thereby indicating that it benefits the public, authorities, and the corporations themselves.